Independence to Liberate the Economy

By Frank Worley-Lopez

Independence is the only real option for Puerto Rico. This is not to say that statehood isn’t a valid option, because within the American union statehood represents political equality. The majority of the people of Puerto Rico, however, do not consider themselves “Americans.”

Culture and language aside, the main reason that independence is the best option for Puerto Rico is economic. Under the US flag, as a commonwealth or a state, Puerto Rico is buried under a mountain of federal laws and regulations that inhibit economic growth and forbid the country from experimenting with new economic models and new trade agreements.

While the pro-statehood party will promote the increased money in federal programs Puerto Rico would receive under statehood — which is true — it fails to address the staggering debt burden that the people of Puerto Rico will eventually be required to pay. Today the island territory has its own US$73 billion debt and is not required to pay federal income taxes.

However, as a state the people of the island would be required to pay federal income taxes, and those taxes would increase as the United States’ staggering $18 trillion national debt and $61 trillion total debt starts to bite.

Puerto Rico is currently seeking a bailout from the federal government. If they succeed, other states and jurisdictions will follow suit, significantly increasing the burden in terms of both credit status and actual debt per citizen. Should the US dollar or the global economy collapse under this burden, which many analysts believe is coming, all of the short-term financial gains provided by statehood will evaporate.

Puerto Rico will be left without the promised financial aid of statehood while being stuck with a debt burden of biblical proportions.

The problem with statehood is that it is a short term economic fix that would only increase dependency on federal subsidies, instead of helping Puerto Rico become independently wealthy. Statehood would promote the continued poverty and cultural malaise that comes with a massive welfare state. Yes, it would provide equal representation in Congress, but what about equal representation in the world?

Moreover, independence will free Puerto Rico from the Merchant Marine Act of 1920 (also referred to as the Jones Act; the previous Jones Act of 1917 granted US citizenship to Puerto Rico). These shipping regulations that require the use of US-flagged vessels and crews, which drive up the cost of shipping goods in and out of the island.

Once freed from this burden, Puerto Rico and its businesses could contract with foreign shipping companies or develop shipping companies of their own, which could then lower consumer prices and create more local jobs.

Independence also allows Puerto Rico to free itself from the suicide pact of the War on Drugs. It allows the rewriting of environmental regulations to actually protect the environment instead of focusing on destroying business, which is what most environmental regulations do today.

There is no question that independence brings great risk and responsibility. However, if done correctly, it could herald a new dawn for the people of Puerto Rico.