The Only Road: Open Letter to Congress and The White House


By Franklin D. López, former United Press International and The Associated Press newswriter

The autumn rainy season began early in Puerto Rico this year. Mother Nature has the ability to determine when its hot enough to open the gates of rains to lower the temperature for the population below. But despite the rains the eco system has not be able to contain the devastating effect of Puerto Rico’s public debt and economic crisis and the failure of the so called “Show Case of the Americas” represented by the territorial status of the “commonwealth!”

Every month, during the past three years, more than 4,000 American citizens from the territory are taking the hard decision of leaving their family and friends, dismembering the social fabric and structure of the territory searching for a better future in the United States. The effect of the massive exodus, 2.3 millions since 1952, has been noticed by political and Wall Street analysts because Puerto Ricans from the archipelago are choosing to reside in states of the union that play a very important role in the election of the President of the United States. An example is Florida. The Center for Puerto Rican Studies published recently the results of a study that revealed the following:

From 2001-2011 283,045 Puerto Ricans moved to Florida; to New York 107,601; Pennsylvania 106,562; to Texas 71,692 and 71,198 to New Jersey. A total of 640,098 or an average of 58,270 per year. Other states selected by Puerto Ricans were North Carolina, Virginia, Ohio and Maryland. This massive population exodus triggered by the colonial policies imposed by the long-distance directives of Washington may constitute and fits the definition of a crime against humanity by the International Criminal Court at The Hague.

All of this states are “battleground states” in a Presidential contest. The massive population exodus has become a Game Changer in the national political landscape. The U.S. Census forecast of the population of Puerto Rico for the year 2050 is that the Island will have the same number of people, 2.3 millions, it had when it adopted Law 600 that granted the adoption of a territorial constitution labeled with the emblematic name “free associated state!” The cost of providing services and governmental programs in their new adopted states is calculated in the tens of billions of U.S. tax payers moneys. Twice what it cost to provide the same in Puerto Rico.

The bad news is that the massive population exodus will continue to grow, fueled by the imposition of 89 new taxes by politicians that only find solutions going into the scarce wallet of the citizens of Puerto Rico. The territory has the highest consumer tax of the Nation. The territory’s population, shrinks the economy, reducing dramatically tax revenues and making Puerto Rico the costliest jurisdiction to live in all of the Americas. The Island suffers from a real estate deflation where property value has plummeted in value between 40 to 60%. Without an economic development strategy together with the second highest cost of energy in the states of the Union, .29 cents kWh, the Puerto Rican government continues to waste the scarce financial resources in useless projects, like a skating ring and contracts to lobbyists, law firms and friends and relatives costing hundreds of millions of dollars. The bottom line effect of the massive exodus is a bankrupt government, a heavily contracted economy (see what a consumer tax did to Japan’s economy!) and a territory left with a demographic profile of the poor and old. A total collapse of the government, economy and the social structure is forthcoming!

Puerto Ricans in the territory treasure their relationship with the United States. Several polls done by local universities and the Gallup organization revealed that 96.7% categorized the holding of the American citizenship their top priority. At the same time these polls also revealed that if Puerto Rico is granted Independence or free association ( an associated republic) 92% of the consulted population expressed that they will move to the United States. What is the solution for the present Puerto Rican quagmire?

With the present economic crisis, a public debt of $ 104 billion dollars (this includes 75 billions of government agencies public debt and $39 billions in the Public Employees Retirement Fund) threatening the stability of the $3.7 TRILLIONS municipal bond market, a real estate deflation and a shrinking economy the so called commonwealth status is simply dead and not feasible. The fall of tax revenues fueled by the exodus and less consumption has already take its toll in the banking industry from 14 banks in 2006 to 5 in 2014. Their non-performing assets are growing by failing businesses; abandoned mortgages houses and an increase in bankruptcies. Under this scenario territorial banks have cut their lending affecting further the deteriorating and comatose economic environment.

What are the solutions for the United States regarding the future of the 3.6 millions American citizens living in the archipelago?

First, the United States government, Congress and the White House, must not ignored what’s happening in the territory today. The present multi-partisan government of the  Popular Democratic Party and the New Progressive Party government has no strategic and realistic economic development plan. Congress and the White House should consider creating a Joint Oversight Territory of Puerto Rico Commission in order to protect the public interest of the Islander and the right use of public funds. The Comptroller of Puerto Rico has issued many public statements indicating that between $900 millions to $1 billions are wasted or lost in acts of public corruption and waste every year.

Second, the policy of imposing 89 new taxes and considering an added value consumer tax of 15%, in order to eliminate 80% of the income tax payers from filing, will be the last nail in the coffin of what is left of the territory’s economy. A new Federal policy should be established to rebuild Puerto Rico and put it in the road to be admitted as a state.

Third, granting political equality to Puerto Rico will trigger the return to the Island of hundreds of thousands of Puerto Ricans that according to the 2010 U.S. Census have left empty 260,000 houses. This influx of returning citizens will increase consumption, tax revenues and it will boost small, medium businesses and it will generate jobs creation and stability. The reverse exodus will save the states of the union, county and municipal government as well as the Federal government billions of dollars in public services and programs.

Fourth, Puerto Rico as a state of the union will serve a catalytic agent for Latin America investors and manufacturers and businesses to promote economic development not only in the new state but also in the 50 states of the Union. The Hawaiian experience when it entered the union should be revisited. Accepting a Hispanic state send a very strong message to Latin America that will neutralized “the open checkbook policy of China in the region with an annual market of more than $ 7 trillions dollars.

The only road to the present crisis and quagmire of Puerto Rico is granting political equality to the 3.0 million remaining American citizens!  Look at the Hawaiian experience. When it joined the union in 1959 it had 440,000 people and in 2015 1,440,000. Only statehood will bring them back home. It’s time to move and take bold leadership on the future of Puerto Rico