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Paul is defining the source of the problem.
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And as typical, in my opinion; utterly wrongly. I would say the causes of immigration are multifaceted, an array of issues from economic, political, social issues in the migrants home country and the promise of a better life in their destination country. While a reasonable pension system and social security do undoubtedly gie the citizens of a country a better standard of living, these humble improvements are largely not given to illegal immigrants, thus they clearly are not an insentive for migration. After all, for an illegal border jumper turning up at the job centre for your dole money is a swift and easy way of getting deported.
Being such an obvious flaw in his argument, I am supprised Paul even made it. But then again, I read a lot of a libertarian explainations for why 'x' is in such a mess and they nearly always seem to have glaring problems the advocate utterly ignores or perhaps hasn't even noticed.