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Most people focus on conditions in the U.S. driving illegal immigration, but ignore external causes. The vast majority of illegal immigrants are here because the economy in their home country is in the shitter. Aid packages that include low-interest loans for starting small businesses have already had success in several countries, including Mexico. Unfortunately, these are poorly funded and really need government assistance to have and effect at the national level. Combining these loans with education and training in how to set up a business, along with changing local laws and reducing corruption to encourage entrepreneurship can drastically improve conditions in poor countries. This also has the advantage of being a permaent solution, and as such will probably cost far less than any "solution" that focuses mainly on acting within American borders.
If you remove the source of the problem, the problem itself will probably go away on its own.
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