The Economist: Movida de AGP Diciendo Puerto Rico No Puede Pagar Puede Ser Para que USA Nos Expulse de la Unión?
Movida de AGP Diciendo Puerto Rico No Puede Pagar Puede Ser Para que USA Nos Expulse de la Unión?
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Feliz Día de la Constitución de Puerto Rico!
«Contrary to what some economists allege in today’s article on Puerto Rico, it is not the application of the federal minimum wage to the American territory of Puerto Rico but the unequal application of other federal laws that affects our economy.
One of the provisions that does not apply is the earned income tax credit that helps approximate the federal minimum wage to a living wage nationwide.
A couple with two kids earning $14,000 in one minimum wage job ends up with $12,929 to spend in Puerto Rico and $18,389-42% more-in any state. The difference? An earned income tax credit of $5,460 that rewards the work ethic, the absence of which promotes joblessness in Puerto Rico.
Extending the Earned Income Tax Credit to Puerto
Rico would be one concrete step that a Congress concerned
about a fiscal crisis that imperils the national municipal market could take today to promote job creation and preservation, move the minimum wage closer to a living wage
in Puerto Rico, stem depopulation and help Puerto Rico dig itself out of the recession it fell into in 2013. Another concrete step includes full Medicare benefits to U.S. citizens in Puerto Rico who paid in their full share of Medicare payroll taxes throughout their careers.
After six decades of failed «special» treatment, why not give equality a spin?
Kenneth D. McClintock
San Juan, Puerto Rico USA
President
Puerto Rico Equality Forum»Hon. Kenneth D. McClintock_________________________
Desde un balcón en la ciudad de Philadelphia (cuna de la Nación), viendo ciudadanos de todos colores corriendo, caminando o corriendo bicicleta a orillas del Sckuykill, leo sobre PR y me arropa nuevamente la decepción y la desesperanza.
Tengo la impresión que por cada paso de avance, damos dos en retroceso; que el PPD y las fuerzas del colonialismo y el status quo están siempre tres pasos al frente; que estamos jugando un juego en el que se nos va la vida y del que, desgraciadamente, nunca nos explicaron las reglas y, cuando las colegimos, nos las cambian.
Los diz que estadistas «invertimos» la mayoría de nuestros esfuerzos en las malditas candidaturas, batallando sobre quién es el verdadero Moisés que nos llevará a la tierra prometida… mientras el Mar Rojo se nos viene encima. Porque resulta ser que no somos los israelitas.
Son muchas las cosas que hay que hacer para adelantar la Estadidad. Pero no hay dinero (el maldito dinero que compra vidas y conciencias), y nos entretenemos peleando por cuál es la mejor estrategia y quién es el mejor portaestandarte y desmereciendo a todo aquel que no pertenezca a mi «tribu.»
Y me pregunto si los dinosaurios en vías de extinción no somos los estadistas, y si Rubén Berrios no terminará teniendo la razón, y PR se convertirá en república por default.
Y recuerdo una linea de aquel poema que leí en high school…: «That’s the way the world ends/not with a bang but with a whimper…»
Sorry to be a Debbie Downer, pero PR y sus jaiberías, intrigas, idioteces, traiciones y malas mañas me tienen mala…
Xenia
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Temo que los comentarios de Xenia sean acertados. La batalla del status se está dando ahora en el frente de los medios nacionales pero el «consenso institucional» parece ser esperar a que podamos abrir el frente del plebiscito en 2017.
José Rodríguez-Suárez
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By granting the interview that resulted in The New York Times article published last Sunday, the García-Padilla administration seems to be playing a game of brinkmanship aimed, at least in part, to advance a political status agenda that would push Puerto Rico towards some form of “enhanced commonwealth” or “sovereign commonwealth” status. Allowing Acevedo Vilá and Cruz Soto to dominate the House insular affairs subcommittee hearing a day after he had presumably told The New York Times that Puerto Rico cannot pay its creditors could be telling of the mindset of La Fortaleza strategists.
If using Puerto Rico’s debt debacle as leverage to achieve a change in the island’s political status were to be the strategy of the García-Padilla administration, statehood advocates do not seem to be ready to counter it. The García-Padilla administration has been presenting false narratives and making misrepresentations before the national news media that neither NPP leaders nor independent statehood advocates have been able to refute. For instance, how many times since the 2013 Barron’s cover story on Puerto Rico have we read that the crisis began in 2006 with the phase-out of section 936, or that the Governor has implemented meaningful measures to reduce spending?
Ironically, the more Puerto Rico is portrayed as America’s Greece the easier it will become for the García-Padilla administration to push a separatist agenda in Washington. As a case in point, the use of the U.S. dollar in Puerto Rico, which we take for granted, was recently referred to as “a currency straitjacket” by the American Enterprise Institute (AEI) and being “locked in a currency union with a richer, more productive neighbor” by The Economist (a 2013 article tweeted days ago). See alsoThe Economist article published today: http://www.economist.com/news/finance-and-economics/21656733-american-territory-wants-restructure-its-debts-doesnt-know-how. There are many more examples.
If Puerto Rico is to have a chance to become a State, statehood advocates cannot wait for the NPP to win the next elections. What is being published about Puerto Rico’s debt debacle today is likely to have a powerful influence on what Congress may do about the island’s political statustomorrow. Too many times I have heard, “tenemos que crear la crisis”. The crisis is now upon us. Which narratives are prevailing in the national news media? Those which favor statehood or those which further the island’s separation from the United States?
From my perspective as a Republican, and taking into account a Republican majority in Congress, statehood needs to be presented as the conservative, free-market, supply-side solution to Puerto Rico’s crisis —now. If the García-Padilla administration can place Puerto Rico’s political status on the table as part of a negotiated solution to Puerto Rico’s debt debacle, it might be too late for us in January 2017.
Jorge Rodríguez Suárez
Puerto Rico
A Caribbean fuse
An American territory wants to restructure its debts but doesn’t know how
On the verge of a tumultuous descent
FOR more than two years Alejandro García Padilla, Puerto Rico’s governor, told the island’s creditors what they wanted to hear. The autonomous American territory, he said, had a “moral obligation” to service its $72 billion debt. It could not default on its “general-obligation” bonds, he added, because its constitution gives payments on them priority over all other expenses. He called attention to his record of tax increases and spending cuts. But after 30 months of reassurances, the governor reversed course this week and announced that he would seek to restructure Puerto Rico’s liabilities. “The public debt…is unpayable,” he declared on June 29th. “This isn’t about politics. It’s about math.”
Mr García Padilla demanded a multi-year moratorium on debt service. “The alternative”, he says, “would be a unilateral and unplanned non-payment of obligations.” Puerto Rican bond yields duly soared, and shares in the island’s banks, which own lots of the bonds, plunged.
Mr García Padilla’s announcement coincided with the release of a report by Anne Krueger, a former IMF official, that painted a grim picture of the island’s economy. It has been contracting in real (ie, inflation-adjusted) terms since 2006, and is now 14% smaller than a decade ago. In nominal terms it has been flat since 2012 (see chart). One reason is the expiry in 2006 of an exemption from federal tax for the Puerto Rican operations of firms from the mainland. But Ms Krueger lists a litany of woes, with striking parallels to the week’s other troubled debtor, Greece.
Both sit at the southern edge of a large currency union and have benefited from big transfers from richer regions. Both lost competitiveness as a result of the strength of those currencies combined with inflexible labour markets. America’s minimum wage applies in the territory, but local workers are less productive than their counterparts on the mainland (the minimum wage is equivalent to 77% of Puerto Ricans’ average income). Worse, federal welfare payments can exceed the minimum wage by half. The disincentives to hire and to work have suppressed Puerto Rico’s workforce-participation rate to a dismal 40%. High labour costs have been compounded by the exorbitant prices charged by the inefficient power company.
Puerto Rico, like Greece, added to its problems by borrowing profligately to fund generous public payrolls at artificially low interest rates—in Greece’s case because lenders assumed the European Union would back the debt; in Puerto Rico’s because income from its bonds is tax-exempt for mainlanders. Both have seen their tax bases dwindle as younger workers have emigrated: Puerto Rico’s population has shrunk by 10% over the past decade. Both hid their liabilities amid a thicket of bureaucracy: Ms Krueger calculates that, what with losses at state-owned firms and unfunded pensions, Puerto Rico’s public sector runs a bigger deficit than the government admits—perhaps 5% of the island’s output. Both have responded to surging bond yields with austerity, which has deepened their recessions and made it harder to service their debts as tax revenue has fallen. Puerto Rico’s latest fiscal report said that, without new loans, it would run out of cash by October.
Ms Krueger’s report reinforces the consensus that debt relief is needed. But finding a mechanism to trim the island’s liabilities will not be easy. Because Puerto Rico is not independent, it cannot repudiate its debts and devalue its currency. But it is not one of America’s 50 states either, and so does not qualify for the municipal-bond section of federal bankruptcy law. The island’s assembly passed a law allowing state-owned firms to restructure their debts, but America’s courts threw it out.
Puerto Rico’s municipal-style debt contracts do not have the “collective action” clauses that allow many sovereign defaulters to force minorities of recalcitrant investors to accept a loss. As a result, every creditor who does not receive full payment can file a lawsuit. The legal protection the island has given to some creditors—the constitutional guarantee on general-obligation bonds, and special recourse to sales-tax revenues for another category of bondholder—gives them little incentive to be flexible. Unflinching investors may even be able to stop their more conciliatory counterparts from receiving a penny until they are paid in full, by exploiting a recent precedent regarding Argentine debt.
Resolving this impasse will require intervention from America’s federal government. Congress could appoint a committee to administer the territory’s finances, allow Puerto Rico’s state-owned firms to declare bankruptcy or bail out the island directly. Making permanent an interim ruling that allows firms whose subsidiaries pay excise tax in Puerto Rico to claim a federal tax credit would help. Many reforms needed to revive growth must be ordered from Washington, such as exempting Puerto Rico from the minimum wage and from a law that bans foreign vessels from shipping goods between American ports. Unfortunately, although Mr García Padilla says he will no longer “kick the can down the road”, the federal government has not displayed the same urgency.
From the print edition: Finance and economics
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Agreed.
The recently publicized KRUEGER Report also includes recommendations that seem to be designed to distance Puerto Rico from the rest of the Nation. To suggest that “Puerto Rico should seek an exemption [of the US federal minimum wage] until such time as its per capita income approaches that of the poorest US state…” is to seek the lowering of Puerto Rico’s standard of living to that of our neighboring republics—thus averting once again our hopes of becoming a state. Suggestions like these will take us back to the “936-era” of a “tax-driven, low-wage” investment jurisdiction.
While overcoming this economic crisis requires resolving our status dilemma (as statehood is a pre-condition to economic growth), it also demands improving our derelict investment environment. As noted in the competitiveness reports published by the World Bank and the WEF, Puerto Rico’s business climate ranks well below that of developed economies—particularly with regards to its public sector (#158 in permits, #133 in taxes, #138 in government bureaucracy, #94 in labor regulation, among others). To improve an investment environment defined by a tax system that is confiscatory, a regulatory structure that is anachronistic and a permitting process that is inordinately bureaucratic, major reforms are in order.
In that regard, and in line with the GOP’s “supply side” economic principles, the KRUEGER Report does include some recommendations that merit consideration. While AGP now calling—for the first time during this 2½-tenure—for the need to grow the economy (through, among others, a labor reform to reduce the high costs of marginal benefits in the Island), it is very frustrating to hear some of our leaders rejecting those reforms on the grounds that they renege hard-won rights (“derechos adquiridos”).
With our public sector teetering on the verge of bankruptcy (and unable to access the capital markets), and a federal government unwilling to pay the costly subsidies that for many years supported corporate interests in the Island, the only way out of this economic mess is through private sector investment. While statehood will significantly improve the Island’s image as an investment destination, there are many progressive-era regulations that could be changed in the meantime. Improving the business climate may stop the downward spiral of economic contraction… and improve our claims for becoming a state. We should insist that, under statehood, Puerto Rico will cost the American taxpayers a lot less than as a Commonwealth.
I call on our leaders to head the efforts to improve Puerto Rico’s battered investment climate. I believe the majority of the people would support reducing 30 days of paid vacations.
CJVivoni
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Want to save Puerto Rico? Make it a U.S. state.
Jorge del Pino
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I agree the PPD agenda looks like they are pushing for a Super-ELA.
I also agree the statehooders need to act now and not wait until Jan.2017.
I have not seen any national newspaper saying that statehood may solve some of the economic problems.
At least, we should try to publish our statehood view in the NYT, WP and WSJ.
Lobbying must also be escalated.
BR,
Frank
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Mi humilde sugerencia es la que he compartido anteriormente. No perder tiempo en refutar lo que otros digan sino en mover el «spotlight» a lo que queremos decir. Si la experiencia económia de la establididad, inversión y desarrollo de 50 estados ha probado 50 veces que el ingreso per cápita, capacidad de ingreso del gobierno y la calidad de vida de sus residentes es superior una vez son estados, por que no propulsar el pensar de que la prosperidad esta en la estadidad y con ella mejoran los residentes de la isla y se evita el impago? Y este análisis estaría enfocado más en el sector privado y el crecimiento que en fondos federales.
Si queremos prosperidad, estabilidad y pago de deuda, hay un solo camino – el #51. Probado con datos.
It’s Hawaii 1956 and we need to wake up to how it is within our reach. But it has to come from an offensive effort and not a defensive one. We have truth and history on our side. Y al que tenga duda, que vea cuantos estadistas, colonialistas, independentistas, etc. estan buscando la prosperidad en la estadidad hoy via Jet Blue. No hay otra. La alternativa es más de lo mismo.
Adelante,
Jaime Fortuño
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Excelente analisis y conclusión.
Pepe tiene los oidos en tierra.
Urge combatir la campaña en los medios nacionales de alguna manera.
Hernán
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Es exactamente así. Se trata de una estrategia que tenga el efecto de congelar la bola del status y/o de moverla en la dirección de las «mejoras» al status presente. Parte de su despligue es en los medios nacionales, en los think tanks y en las esferas políticas federales. En P.R. no tienen que hacer mucho pq los medios ya estaban en ese bote. A fin de cuentas los beneficiarios de la situación actual idearon la estrategia y la financian. La retórica de la imposibilidad de pagar, crisis, favorecer la quiebra del gobierno central etc. son parte de sus tácticas.
Poco importa que no haya plan para la recuperación. Localmente convocan a la unidad, al sentido patriótico, a los consensos. A Dios rogando y con el mazo dando. Así desmienten desde la doctrina de RHC de que «sin poderes no se puede» hasta la conclusión del Grupo de Trabajo de Casa Blanca en cuanto a que la raíz de la limitación al desarrollo es el status político.
Tanto Pedro Pierluisi como Rubén Berríos han preguntado por el plan que el gobierno quiere discutir con ellos, han cuestionado conclusiones y recomendaciones de Krueger, han planteado el componente del status. «Hoy no. Mañana te abriremos, respondía, para lo mismo responder mañana» . Me consta que El Nuevo Día ha cortado estas referncias de sus noticias y entrevistas al respecto.
Por todo ello hay que estar ojo avizor y saber que en algún momento hay que explotarles el globo del duérmete nene local así como subirle el fuego al tema del status aunque sepamos que nosotros haremos el plebiscito de Estadidad Sí o No al que tanto temen a principios de 2016 y, como diría Juan manuel García Passalacqua, confrontaremos al americano.
HRR
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De acuerdo con Héctor, Pepe y Jaime.
Creo que debemos invertir mucho más tiempo accesaando los thinks tanks, editores de los principales medios escritos nacionales y por supuesto programas que crean opinión pública a nivel nacional.
Es parte del plan de trabajo de Igualdad para el 2015 y debemos acelerar el paso.
Annabelle
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Lo que hay es que comenzar a ser creativos utilizando los medios en lo que les gusta: Lo Inesperado, Estridente, Protagónico, CRB me invitó a encadenarnos en los Portones de Casa Blanca, cosas como esas hacen falta para promover la Estadidad.
FRG
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Se agrava la caída de Puerto Rico
Para trabajar por la Estadidad:
http://estado51prusa.com
Seminarios-pnp.com
https://twitter.com/EstadoPRUSA
https://www.facebook.com/EstadoPRUSA/
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