The Future of Puerto Rico

At the recent Senate Finance Committee hearing on Puerto Rico’s financial crisis, Sergio M. Marxuach, Public Policy Director of the Center for a New Economy, spoke on how Puerto Rico could come through the current crisis with a stronger economy.

Marxuach talked about the need for debt relief, for the end of unsustainable tax loopholes, for improvements in education, and for changes to make the island more business-friendly.

But he also talked about Puerto Rico’s political status.

I would be negligent if I did not raise the question of whether Puerto Rico has reached the limits of what it can do to improve the quality of life of its people within the constraints imposed by its subordinate political status.
Neither a sovereign country nor a state of the union, Puerto Rico has no authority to negotiate international treaties, no access to emergency financing from multilateral institutions, no monetary policy instruments, limited fiscal policy tools, nominal representation in Congress, and the U.S. Supreme Court has determined it is constitutionally permissible for Congress to discriminate against Puerto Rico in the application of federal programs.

We are seeing headlines that suggest that Puerto Rico has created its own problems and that Washington shouldn’t help. But this viewpoint ignores the effects of Puerto Rico’s political status on the economy of the island.

Puerto Rico lives in a state of permanent limbo, a status that is both humiliating to Puerto Ricans and unworthy of the United States. Simply stating that it is up to Puerto Ricans to decide their political status, while true, is insufficient because the United States’ Congress has long-standing legal and moral obligations with respect to Puerto Rico that it has failed to honor. Congressional failure to act not only highlights a shameful lack of political will, it also weakens the United States’ moral standing…when it argues for better treatment for Hong Kong by China, for the Palestinians by Israel, or for Greece by members of the Eurozone.

Puerto Rico voted for statehood in 2012. Rather than acting on that vote, Congress allowed Puerto Rico to slide into its current crisis. Tell your legislators that it’s time for action.

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