After Iraq, the most contentious issue in the USA right now is illegal immigration — most of it from Mexico. And the root cause of illegal immigration is poverty. About half of Mexican homes don't have the money to buy basic necessities. The average income of poor Mexicans is $4 a day, according to the latest statistics.

Now that kind of abject poverty is driven by poor education. An astounding 60 percent of Mexican citizens fail to graduate from high school. So mostly to earn money, between 12 and 20 million illegal aliens have entered the USA. The majority of them Mexican.

Many Americans are asking with huge oil reserves and two beautiful coastlines, why can't the government of Mexico develop a first world economy? We'll put that question to President Fox in a moment.

Some analysts believe that corruption in Mexico has lead to the economic chaos there. Certainly the drug traffickers are causing an enormous problem. Thousands of Mexican citizens have been murdered by drug dealers, including journalists, politicians, even a Catholic archbishop. Ninety percent of the cocaine that enters the USA comes through Mexico, as does tons of marijuana and heroin.

All of this is taking a huge toll on both Mexico and the USA. As of August, nearly 34,000 Mexican nationals were serving time in American federal prisons, most of them for violent crimes and/or drug offenses. That is 17 percent of the entire federal prison population. More than 75,000 Mexicans are right now in state prisons, costing the taxpayers tens of millions of dollars.

So, this is a very intense situation, ladies and gentlemen, and one that must be solved. Unfortunately, Congress and the Mexican government can't seem to get a handle on it for a variety of reasons.

"Talking Points" believes that tight border security, including offense and the National Guard, is the first step, followed by alien registration, so we know who's here, and working permits for those who have legitimate jobs and clean record. Also, American businesses that continue to hire illegals have to be heavily fined. There is no other way to solve this problem.

And that's "The Memo."

Pinheads and Patriots

You know President Fox didn't have to come in here tonight. Many other politicians have dodged this venue, because it's too tough. Tony Blair dodged us. So for having the, well, moxie, to appear on "The Factor", we are making Mr. Fox a patriot this evening.

On the pinhead front, last night I made Bruce Springsteen an offer: Come on "The Factor" and debate, and I'll donate $25,000 to Habitat for Humanity. That would obviously help some poor people.

So far, the Boss has not even replied. Springsteen, in my estimation, is not un-American. He is simply a pinhead.

—You can catch Bill O'Reilly's "Talking Points Memo" and "Most Ridiculous Item" weeknights at 8 and 11 p.m. ET on the FOX News Channel and any time on foxnews.com/oreilly. Send your comments to: oreilly@foxnews.com