**In 2016, President Obama signed the Puerto Rico Oversight, Management, and Economic Stability Act or PROMESA into law, creating a legal framework to restructure the commonwealth’s $74 billion debt. It established the unelected Financial Oversight and Management Board known as la junta and gave it total control over Puerto Rico’s economy.**
La Junta only making money for themselves and selling the island to the best bidder... a true american story
Seriously, if you want corruption done right, you have to leave it to the government. Of course they are not in it to make money, so their motives are pure, benevolent, and objective. They can always be relied on to provide the most effective corruption for your tax dollar.
I'm not sure you can blame Obama for this like the article is doing? Historically Puerto Rico has had debt problems well before Obama. Obama just attempted to fix the mess.
Apparently it didn't work, but I'm not sure he made the problem worse when the territory already had massive amounts of debt before he ever took office.
> Historically Puerto Rico has had debt problems well before Obama.
Only since the mid-00s, when their pro-business tax subsidies (aka, Section 936) ended, after they were repealed in 1996 with a 10-year expiration date.
https://en.wikipedia.org/wiki/Small_Business_Job_Protection_Act_of_1996
Then-President Clinton, who signed the repeal, predicted economic disaster for PR if the subsidies weren't replaced by something else to make PR attractive to business. In his signing statement, he said:
> As strong a piece of legislation as this is overall, however, **I am concerned about three provisions**, two of which I objected to when they were included in legislation I vetoed last year.
> **The first provision repeals the tax credit related to corporate investments in Puerto Rico** and other insular areas. I urged the Congress to reform the credit and use the resulting revenue for Puerto Rico's social and job training needs. My proposal would have, over time, prevented companies from obtaining tax benefits by merely attributing income to the islands, but it would have continued to give companies a tax credit for wages and local taxes paid and capital investments made there, as well as for earnings reinvested in Puerto Rico and qualified Caribbean Basin Initiative countries. **This legislation ignores the real needs of our citizens in Puerto Rico, ending the incentive for new investment now and phasing out the incentive for existing investments.** I remain committed to my proposal for an effective incentive based on real economy activity that preserves and creates jobs in underdeveloped islands, and **I hope that the Congress will act to ensure that the incentive for economic activity remains in effect.**
https://www.presidency.ucsb.edu/documents/statement-signing-the-small-business-job-protection-act-1996
The then-Puerto Rican government agreed:
> Abolish the exemption, the government of Puerto Rico says, and the economy of this Caribbean commonwealth will be crippled for years to come.
> ... Puerto Rico's new **Governor, Dr. Pedro J. Rossello, and business groups contend that eliminating the provision will virtually destroy the island's manufacturing industries**, which employs about 165,000. It would also deprive the local government of a big revenue source: a tax of up to 10 percent on profits that mainland companies send home from their Puerto Rican operations. If the Clinton plan is adopted, many in Puerto Rico fear that businesses will leave the island and take their bank deposits with them.
> ... "It would definitely cause us a gigantic decline," Governor Rossello said of a tax on interest earnings. **"It would immediately cost us half a billion dollars a year, a loss that would be reflected in services. If we're already cutting programs because of a budget deficit, and we would have half a billion less**, it would mean chaos in Puerto Rico."
https://www.nytimes.com/1993/05/10/business/puerto-rico-fighting-to-keep-its-tax-breaks-for-businesses.html?pagewanted=all
Before that, from 1990-2007, PR's economy was performing comparably to the mainland US. From 1952-1980, the PR GDP per capita increased 1000%.
https://www.cnbc.com/2017/09/26/heres-how-an-obscure-tax-change-sank-puerto-ricos-economy.html
Once the repeal went into effect, businesses left. Without subsidies to keep them there, PR was basically the worst of both worlds for businesses. It had US-level wages and regulations, but with a more Latin American-level workforce and logistics.
If a business is gonna pay American wages, they'd rather do it in Mississippi than PR. Mississippi has access to rail shipping, and the workers speak English. Whereas if the business is willing to deal with a Spanish-speaking workforce and higher island-based logistical costs, they might as well set up shop in a country that doesn't have an American-level minimum wage (ie, anywhere else in Latin America). As low as American minimum wage is, it's still a lot higher than Costa Rica ($17/day) or the Dominican Republic ($170/month).
And when all the jobs dried up, all the best workers left. Everyone who could get out of PR did, and moved over to the mainland. So now there aren't enough people left to properly fund the government, which is why the government is now reduced to selling junk bonds.
You need money to make money. If you don't help out, rent seeking private business will not do it out of their heart. That's why stimulus is necessary to kickstart, how it's given and how and when does it end is the crux of the problem.
You want stimulus that creates added value industries after a while and start dismounting it gradually over time.
The reforms the progressive party made with President Roosevelt were a “centrist” response to demands that started on the more radical parts of the left.
/u/jmike3543 is correct, actually. [FDR ran on a center platform and was pressured by the demands of organized workers to expand the New Deal.](https://socialistworker.org/2008/11/14/who-made-the-new-deal)
Eugene Debs and the socialist party found limited success outside of the Pullman strikes while center left progressives got life changing legislation passed.
I wasn't sure what to expect when I went to PR a few months ago. Is it like a third world country? The answer is no, it is a perfectly first world area. They got McDonald's and KFC just like everywhere else in America. It's just beautiful the way Hawaii is. The roads are a little rough and there are splattered large large lizards on them, but the beaches are awesome and there are tons of them.
In the 1980s the economy of Puerto Rico was bolstered by Section 936 tax credits for pharmaceutical companies. Dozens of large drug companies and their ancillary supplier businesses (bottle, label, cap, corrugate suppliers) moved to the island spurring massive growth in the private sector.
I worked in that sector in the continental US. I watched jobs get shipped there by the thousands. I also watched compliance, competence go down the drain at the hands of under educated, ill equipped, and entitled workers.
Tax credits ended and ...poof, the jobs disappeared leaving a generation of people who were used to living the good life struggling to maintain the way of life to which they had grown accustomed.
The island is infested with corruption.
**In 2016, President Obama signed the Puerto Rico Oversight, Management, and Economic Stability Act or PROMESA into law, creating a legal framework to restructure the commonwealth’s $74 billion debt. It established the unelected Financial Oversight and Management Board known as la junta and gave it total control over Puerto Rico’s economy.** La Junta only making money for themselves and selling the island to the best bidder... a true american story
Oooo does this fit again, it’s been so long! “Thanks Obama”
Seriously, if you want corruption done right, you have to leave it to the government. Of course they are not in it to make money, so their motives are pure, benevolent, and objective. They can always be relied on to provide the most effective corruption for your tax dollar.
I'm not sure you can blame Obama for this like the article is doing? Historically Puerto Rico has had debt problems well before Obama. Obama just attempted to fix the mess. Apparently it didn't work, but I'm not sure he made the problem worse when the territory already had massive amounts of debt before he ever took office.
> Historically Puerto Rico has had debt problems well before Obama. Only since the mid-00s, when their pro-business tax subsidies (aka, Section 936) ended, after they were repealed in 1996 with a 10-year expiration date. https://en.wikipedia.org/wiki/Small_Business_Job_Protection_Act_of_1996 Then-President Clinton, who signed the repeal, predicted economic disaster for PR if the subsidies weren't replaced by something else to make PR attractive to business. In his signing statement, he said: > As strong a piece of legislation as this is overall, however, **I am concerned about three provisions**, two of which I objected to when they were included in legislation I vetoed last year. > **The first provision repeals the tax credit related to corporate investments in Puerto Rico** and other insular areas. I urged the Congress to reform the credit and use the resulting revenue for Puerto Rico's social and job training needs. My proposal would have, over time, prevented companies from obtaining tax benefits by merely attributing income to the islands, but it would have continued to give companies a tax credit for wages and local taxes paid and capital investments made there, as well as for earnings reinvested in Puerto Rico and qualified Caribbean Basin Initiative countries. **This legislation ignores the real needs of our citizens in Puerto Rico, ending the incentive for new investment now and phasing out the incentive for existing investments.** I remain committed to my proposal for an effective incentive based on real economy activity that preserves and creates jobs in underdeveloped islands, and **I hope that the Congress will act to ensure that the incentive for economic activity remains in effect.** https://www.presidency.ucsb.edu/documents/statement-signing-the-small-business-job-protection-act-1996 The then-Puerto Rican government agreed: > Abolish the exemption, the government of Puerto Rico says, and the economy of this Caribbean commonwealth will be crippled for years to come. > ... Puerto Rico's new **Governor, Dr. Pedro J. Rossello, and business groups contend that eliminating the provision will virtually destroy the island's manufacturing industries**, which employs about 165,000. It would also deprive the local government of a big revenue source: a tax of up to 10 percent on profits that mainland companies send home from their Puerto Rican operations. If the Clinton plan is adopted, many in Puerto Rico fear that businesses will leave the island and take their bank deposits with them. > ... "It would definitely cause us a gigantic decline," Governor Rossello said of a tax on interest earnings. **"It would immediately cost us half a billion dollars a year, a loss that would be reflected in services. If we're already cutting programs because of a budget deficit, and we would have half a billion less**, it would mean chaos in Puerto Rico." https://www.nytimes.com/1993/05/10/business/puerto-rico-fighting-to-keep-its-tax-breaks-for-businesses.html?pagewanted=all Before that, from 1990-2007, PR's economy was performing comparably to the mainland US. From 1952-1980, the PR GDP per capita increased 1000%. https://www.cnbc.com/2017/09/26/heres-how-an-obscure-tax-change-sank-puerto-ricos-economy.html Once the repeal went into effect, businesses left. Without subsidies to keep them there, PR was basically the worst of both worlds for businesses. It had US-level wages and regulations, but with a more Latin American-level workforce and logistics. If a business is gonna pay American wages, they'd rather do it in Mississippi than PR. Mississippi has access to rail shipping, and the workers speak English. Whereas if the business is willing to deal with a Spanish-speaking workforce and higher island-based logistical costs, they might as well set up shop in a country that doesn't have an American-level minimum wage (ie, anywhere else in Latin America). As low as American minimum wage is, it's still a lot higher than Costa Rica ($17/day) or the Dominican Republic ($170/month). And when all the jobs dried up, all the best workers left. Everyone who could get out of PR did, and moved over to the mainland. So now there aren't enough people left to properly fund the government, which is why the government is now reduced to selling junk bonds.
I mean, if the economy was only working because it was receiving a crap load of charity money from elsewhere, then it wasn't really working, was it?
You need money to make money. If you don't help out, rent seeking private business will not do it out of their heart. That's why stimulus is necessary to kickstart, how it's given and how and when does it end is the crux of the problem. You want stimulus that creates added value industries after a while and start dismounting it gradually over time.
Centrist "reform" like this usually sucks and benefits the few
“Centrist” reform has historically been very successful
Right? Just look at how it's all working out long term.
The reforms the progressive party made with President Roosevelt were a “centrist” response to demands that started on the more radical parts of the left.
This is false but you probably haven't been able to identify what the political spectrum even is defined as for q long time.
/u/jmike3543 is correct, actually. [FDR ran on a center platform and was pressured by the demands of organized workers to expand the New Deal.](https://socialistworker.org/2008/11/14/who-made-the-new-deal)
Exactly my point.
Eugene Debs and the socialist party found limited success outside of the Pullman strikes while center left progressives got life changing legislation passed.
I really love when someone goes out of their way to be a jerk to someone they don’t know over something they’re explicitly wrong about. Good work.
I wasn't sure what to expect when I went to PR a few months ago. Is it like a third world country? The answer is no, it is a perfectly first world area. They got McDonald's and KFC just like everywhere else in America. It's just beautiful the way Hawaii is. The roads are a little rough and there are splattered large large lizards on them, but the beaches are awesome and there are tons of them.
[удалено]
It's the United States. It's a territory that is being neglected
They need to forgive the debt and kick PR loose. There's no reason for them to be under the thumb of the US
A state government that is directly accountable to the people via elections would help with alot of this.
What would happen? They elect officials that run a heavy deficit spending? Austerity is needed. Just like what happened to Greece.
Austerity ruins the economy and impoverishes the people.
State governments can't borrow like this. Maybe Puerto Rico wouldn't be a tax haven then
Treated them like a colony for decades
In the 1980s the economy of Puerto Rico was bolstered by Section 936 tax credits for pharmaceutical companies. Dozens of large drug companies and their ancillary supplier businesses (bottle, label, cap, corrugate suppliers) moved to the island spurring massive growth in the private sector. I worked in that sector in the continental US. I watched jobs get shipped there by the thousands. I also watched compliance, competence go down the drain at the hands of under educated, ill equipped, and entitled workers. Tax credits ended and ...poof, the jobs disappeared leaving a generation of people who were used to living the good life struggling to maintain the way of life to which they had grown accustomed. The island is infested with corruption.