Wednesday, April 20, 2016

Tunnels Between the U.S. & Mexico Highlights Shadow Market Problems

The discovery of an 800 yard tunnel in San diego  highlights a  growing problem of the Shadow Market and how it impacts the economy. Money is a great motivator and the shadow market exists along with the legitimate market in an effort to earn profit and minimize expenditures. The problem with the shadow market is that there is no oversight and no one can be sure what is moving through it.

According to a study conducted by Havoscope the U.S. Black Market is the largest in the world with 625 billion dollars. This surpasses the  China's #2 spot at $261 billion and Mexico's #3 spot at $126 billion. The problems are not likely to go away anytime soon as the U.S. is a prime target for all types of theft and shadow market commerce.

In the Black Market taxes are not being paid even on legal products puts taxpayers on the hook. This may not be a problem for criminals but is a problem for those who have to support Social Security, the building of roads and need to fund law enforcement. Illegal markets take away from our ability to manage the economy and balance our national deficit.

Likewise, such markets don't have oversight and make their profit by skirting legislation. For example, a Shadow Market company focused on removing bulk waste products cheaply might be dumping the product into our rivers or skirting environmental regulations to make up that price difference. This can create a big problem down the road as all of us suffer from its impact when river beds are toxic and fish populations are dying.

It is important to report Shadow Market activities to ensure that such behaviors are brought into the official market and can be taxed and regulated appropriately. It is not an innocent crime as tax payer bills rise and difficult to calculated damage occurs to the economy. Nations like the U.S. that have high Black Market activities need to find new ways to address the issues. Cross border legislation and treaties that ensure enforcement on both sides are needed.

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