There is a great misconception about who is supporting whom in the Caribbean. Wall Street says that Puerto Rico “owes” $73 billion. The US government says they “give” Puerto Ricans $4.6 billion per year.
But there is something suspicious about all this “owing” and “giving.” If the US is so generous, then why is everyone broke? Why is the per capita income of Puerto Ricans only $16,400…far less than any state in the union?
CONSIDER THE SLAVE
By way of context, consider a slave…
A slave does not pay taxes.
A slave does not suffer from unemployment.
A slave receives free food, housing, clothing and health care.
Described in this manner, a slave should pay his master, for the privilege of being a slave!
Ungrateful slaves, receiving free room and board
As ridiculous as this may sound, it is precisely the argument that many Southern slave owners made, prior to the US Civil War. They spoke of the “white man’s burden” to train, and sustain, an inferior race that could not get along without them – the black race.
Meanwhile that black race was sustaining them, their economy, and their entire way of life.
CONSIDER PUERTO RICO
With this history in mind, consider Puerto Rico…
The island is a captive market of the US: the fifth largest market in the world for US products. 85 percent of everything purchased and consumed in Puerto Rico, comes from the US.
All of these products are wildly overpriced, thanks to the “price protection” of the Jones Act, aka the Law of Cabotage.
For the past few years, consumer spending on the island has hovered at $35 billion per year.
Thanks to the Jones Act, the prices paid by Puerto Rican consumers are roughly 20% higher than on the mainland.
20% of $35 billion (the annual consumer spending) is $7 billion. This is the amount of excess prices on goods paid every year, by Puerto Rican consumers.
85% (the percentage of goods that come from the US) of $7 billion is $5.95 billion.
So Puerto Ricans pay roughly $5.95 billion in annual excess profits to US corporations, thanks to the Jones Act. That amount exceeds the $4.6 billion in federal benefits that the US “gives” to Puerto Rico.
But wait, there’s more…due to the reduction in Medicare Advantage funds as of 2016, the US will reduce its “giving” to Puerto Rico by $500 million. So as of 2016, Puerto Ricans will receive only $4.1 billion back from the US government, but pay $5.95 billion in excess profits to US corporations.
And this is counting just the excess profits, on top of the original profits.
EL CIRCO DE LA MEGA
For a more complete picture of “who is really supporting who?” a top-rated TV show in Puerto Rico offered an answer.
The show is called El Circo de La Mega. They invited an economist named Rosario Rivera Negrón to explain “who is supporting who?”
Ms. Rivera Negrón is a full professor at the University of Puerto Rico, with a Ph.D. in Economic Development. She is also President of the Association of Puerto Rican Economists.
With facts and figures on a detailed chart, Prof. Rivera Negrón demonstrated one astounding fact: that in a typical year (2008), the island received a total of $4.6 billion in federal dollars, while contributing $71.6 billion dollars back to the US economy.
In other words, in 2008, Puerto Rico contributed $67 billion dollars more to the US, than the US to Puerto Rico!
This is the exact opposite of the myth, that Puerto Rico is living off the backs of US taxpayers.
Given this fact – that Puerto Rico gives far more to the US than it gets in return – it is difficult to see how the island should owe a $73 billion “public debt” to the US.
If anything, the US should be paying $73 billion to Puerto Rico!
Please view this video of Prof. Rivera Negrón on El Circo de La Mega, and see for yourself.
And remember…the woman presenting these facts is a university economics professor, and the President of the Association of Puerto Rican Economists.
For a history of the War Against All Puerto Ricans, read the book…
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