Puerto Rico

Puerto Rico Needs Free Market Prosperity, Not Soros-supported Bankruptcy

After years of excessive government spending, inefficient and corrupt state-run enterprises, and a tax and regulatory structure that stifles business development and economic growth, it is clear that precisely what Puerto Rico needs is a strong cocktail of free market economic and financial reforms. Congress will soon take up this debate, and on one side, the government of the Commonwealth, the Barack Obama Administration and many liberal or progressive Democrats in Congress support some form of bailout and bankruptcy for Puerto Rico, while many Republicans and conservative groups see reform as key to a prosperous future, and solving the current crisis, for the Commonwealth of Puerto Rico.

Wealthy investor and far-left political activist George Soros has weighed on this issue as well, siding firmly with his support for bailout and bankruptcy for Puerto Rico. Mr. Soros tweeted, “In debt-ridden Puerto Rico, cuts to vital services are affecting many of the most vulnerable there.”

Reactionary Politics

A friend of mine, who is staff for a prominent modern West Coast Republican congressman, told me that on April 29, a plethora of voters called in opposition to the Puerto Rico Democracy Act. An ocean of misinformation had engulfed these voters and caused them to drown out their rationality.

When experiencing one of these angry (white) voters that day, the emotion and hate was on full display. Getting red in the face as he talked, one conservative screamed at me, “This is a push by the Democrats to make Puerto Rico a state so they can have a filibuster proof majority!”

When I told him that he apparently knew absolutely nothing about the bill, he replied, “I know that the Obama administration cares nothing about the American people or the American people.” When I pointed out that the current status of Puerto Rico, as little more than a territory that is not fully included in our country yet not a country of their own, is a relic of a colonial past, he said, “They need to learn english! If they don’t learn english, they’ll just be second class citizens.” I told him that he was obviously looking at things he didn’t comprehend with little more than his prior prejudices, to which he said, “It’s not prejudice! It’s principle.” I pointed out to him that he was confusing his prejudices with “principles.”

Reforms, not Bailout or Bankruptcy, Prevail in Puerto Rico Legislation

PR-map

After a long public debate over what Congress should do to address the current debt and financial crisis in Puerto Rico, free market oriented reforms have won the day. While the government of the Commonwealth requested, and our Obama Administration supported, Chapter 9 bankruptcy, many Republicans in Congress and grass-roots citizen groups opposed that and argued for reforms in Puerto Rico instead. The legislation released in Congress clearly is on the side of reform and doesn’t include or enable bankruptcy.

The Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), introduced by Rep. Sean Duffy (R-WI) as well as Reps. Rob Bishop (R-UT) and Jim Sensenbrenner (R-WI) will create an Oversight Board to assist the Commonwealth in enacting reforms and reign in their out of control welfare state as well as managing their debts. The legislation does not contain any bailout provision nor does it provide for or allow Chapter 9 bankruptcy. PROMESA will bring order to the chaos in Puerto Rico, prevent a catastrophic humanitarian crisis, and will build a foundation for prosperity in the Commonwealth, and ensure its access to capital markets.

Puerto Rico has accumulated more than $118 billion in debt from bonds and unfunded pension liabilities. The government has been unable to manage this debt and has already begun defaulting on its repayment. On July 1, the Commonwealth is likely to default on an additional $2 billion in debt that includes $800 million of constitutionally backed debt.


The views and opinions expressed by individual authors are not necessarily those of other authors, advertisers, developers or editors at United Liberty.