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Kevin Smith
UWRT 1102
Professor Voltz
12/09/2015
El Dinero Muerto
The economy has been a major problem that the government of Puerto Rico has
been facing for the last decade. According to Huffington Post, Puerto Rico is
depopulating at an alarming rate. Migration to the United States has been a trend since
the Great Migration in 1950. However this time its different because according the
Huffington Post, outmigration never stalled population growth in the island. After reading
alarming articles like this and speaking to Puerto Ricans, I decided I would do more
research on it so I could learn more. I focused on four major points, which were,
statistics, economy, government failure, US-statehood relations.
Theyre a lot of things that can ultimately destroy an economy. I decided Id focus
on the government in particular and figure out their failure as a unit. The government has
indeed failed the island but it has been a history of borrowing that is destroying the
islands economy. Puerto Rico has been in debt for a very long time and according to
Vox.com, Puerto Rico (like an US State) has no legal way of filing for bankruptcy. The
governor has come out and declare the island needs a way to restructure the debt so the
island can ultimately recover. With no legal way for this to happen, the island is in big
trouble. It becomes a domino effect with its citizens and they end up paying the price.
Property, sales and income tax rates have sky rocketed to the point where a lot of Puerto
Ricans are using their right to migrate to the US in search of stability. While its great that

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these citizens have the right to move to the states, it ends up hurting the island more and
puts them in even more debt.

You may be asking yourself, how can such a small island acquire so much debt.
Luckily vox.com had a great article that provided a timeline and critical mistakes that

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setup the island for the disaster they are going through today. Ive learned that Puerto
Rico is in an estimated by CNN, seventy-two billion dollars in debt. The economy has
been struggling since the 2006 recession but they have been using a federal tax loophole
that allows them to borrow money even though they wont be able to pay it back. Sounds
at like student loans in that Puerto Rico has tried to defer this credit for too long and now
they are being forced to pay. Taxes will rise, jobs will be lost (especially government
ones) and things such as food and utilities will be hard to afford. The recession started in
2006 and the reason can solely fall on the hands of the US government. Puerto Rico is a
territory of the United States and that has its costs and benefits. The US only intervenes
with PR when they deem it benefits them and not the other way around. Migration
provides more tax dollars for the US and to the US PRs only value is money. So when
Puerto Rico tired to offer businesses incentives to have their bases on the island that
entailed big tax breaks. The economy was doing better, there were more jobs and less
crime. The US stepped in and ended these incentives forcing these businesses to look
elsewhere. According to vox.com 45.4% of Puerto Ricans were living in poverty in 2013.
During this time period thousands of people and companies invested in bonds, which now
hold around sixteen billion in PRs national debt. This is extremely relevant to both
parties because Americans own many of these bonds.
I originally thought US statehood would be the answer; Ive gone as far as asking
Puerto Rican/ American dual citizens for their opinion. All of them agree against Puerto
Rico becoming a state. Granted theyve all moved to the states to avoid this economic
downfall but none of them even consider the idea of statehood. This is because the United
States has exerted power over Puerto Rico that has continuously hurt the island. The fact

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that the US can stop the island from growing its economy via business tax cuts, but wont
bail out the island when it needs help sums up the relations between the two. Would
statehood solve these issues? Yes I think it would. Ultimately it may be time for Puerto
Ricans to accept status change for the good of the island. If they can obtain the same
financial and legal protection that any state would get, economically things would calm
down a bit. Unfortunately the support still slightly favors the continuation of the
commonwealth for PR. Becoming a state would be the path to equality and revenue
sharing that the island needs. Since congress accepted the Commonwealth status to be it a
free and associated state it has only been proven to be a lie. The island is not free to
control its own immigration, trade, tourism, revenue and all other things that comes with
being a free state. It is not a state since it does not get equal funding and does not control
its own economy. The worst of it all may be the fact that an island in the middle of the
ocean cant receive or export goods without going through the United States. This is
modern day colonialism and its time for a change. If they can follow the blueprint of
Hawaii and become a state full of different cultures and tourism, it could be a huge
benefit to the US not to mention three million more taxpayers.
Ive concluded that the current political status of Puerto Rico is the result of
various political decisions within both the US and Puerto Rican governments. The basic
question regarding this issue is whether Puerto Rico should remain a U.S.
territory, become a U.S. state or become an independent country. American and Puerto
Rican political activities regarding the status question have revolved around three sets of
initiatives: presidential executive orders, bills in the U.S. Congress, and referenda held in
Puerto Rico. U.S. Presidents have issued three executive orders on the subject, and

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Congress has considered four major bills on Puerto Rico's political status. Puerto Rican
status referenda have been held four times to determine the desired political status of
Puerto Rico in relation to the United States of America. I have found through my research
that many of these issues can be solved by stopping the trend of mistakes both parties
have made over the last thirty years. These issues are a lot to cover and it will take time to
recover the island but the US and PR need to work together for that to happen. Statehood
could benefit both parties in many ways. At the moment both sides may think their
smaller advantages over each other outweigh coming together. I think that PR would be a
great addition to the US economically, culturally and politically. The language barrier
isnt as big as it used to be because today a good portion of America is able to speak
Spanish. These issues arent impossible to solve, with patience and persistence the two
parties could form a healthy bond.

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Works Cited
"Addressing Puerto Rico's Economic and Fiscal Crisis and Creating a Path to Recovery."
The White House. The White House. Web. 7 Dec. 2015
Akiboh, Alvita. "Puerto Rico's Relationship with the United States? - US History
Scene." US History Scene. US History Scene, 8 Nov. 2012. Web. 15 Oct. 2015.
<http://ushistoryscene.com/article/puerto-rico/>.
DiSalvo, Daniel. "Is Puerto Rico Our Greece?" The Daily Beast. Newsweek/Daily Beast,
30 Aug. 2015. Web. 20 Oct. 2015.
<http://www.thedailybeast.com/articles/2015/08/30/why-puerto-rico-should-be-astate.html>.
Patton, Zach. "Does Puerto Rico Really Want to Be the 51st State?" Does Puerto Rico
Really Want to Be the 51st State? Governing.com, 8 July 2013. Web. 15 Oct.
2015. <http://www.governing.com/topics/politics/gov-does-puerto-rico-reallywant-to-be-51st-state.html>.
"Puerto Rico's Debt Crisis, Explained in 11 Basic Facts." Vox. 3 Aug. 2015. Web. 7 Dec.
2015.
Sobrino, Alejandro. "Puerto Rico's Rapture." The Huffington Post.
TheHuffingtonPost.com. Web. 7 Dec. 2015.

"Addressing Puerto Rico's Economic and Fiscal Crisis and Creating a Path to Recovery."
The White House. The White House. Web. 7 Dec. 2015
Meachem, Carl. "Puerto Rico Debt: Is Becoming the 51st State the Answer?"
Newsweek.con. Newsweek.com. Web. 7 Dec. 2015

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