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by Rod D. Martin
April 2, 2014
I could be extremely pro-Puerto Rican statehood. The U.S. Constitution was the original EU, after all, minus all the statist bureaucratic blather. All of our states are countries: that’s what “state” means; and aside from the original 13, several more joined the union very much as one joins the European Union, from Vermont to Texas to the “Bear Republic” in California to Hawaii. All of those except the first came multi-lingual and with mixed ethnicity. They all worked out just fine.
But I’m not pro-statehood, at least not for now, for the same reasons I wasn’t back in 1998. Since then, the whole world got a miniature lesson on this during the Great Recession: the Southern European PIGS (plus Cyprus) collapsed or nearly collapsed because they were too poor to enter a currency union with the more dynamic powers of Northern Europe, with tragic consequences for the South and a costly nightmare for the North.
Puerto Rico would be the American Greece (and not the metaphorical one that California or even Detroit are sometimes claimed to be). This is inescapable.
This week’s General Accountability Office (GAO) report underlines and highlights what I was saying fifteen years ago, and substantially compounds the Greek comparison. It ain’t pretty, and the people who really get the short end of the stick are the Puerto Ricans.
This shouldn’t shock us. In 1999, the last time the Democrats forced a statehood referendum, just 46% of Puerto Ricans voted for statehood. In 2012, it was down to 44%. Supposedly the Dems are “standing up for Latinos,” so why do these leftists keep pushing what would unquestionably be a disaster for the people of Puerto Rico? In a phrase, U.S. elections: statehood would give Democrats two new U.S. Senators, eight new U.S. House members, and an irreversible victory for a form of multiculturalism that divides without uniting.
In short, Democrats are blatantly sacrificing Puerto Rico to advance their domestic political agenda, a cynical Alinskyite move like unto their century-long misrule of Chicago. It’s just who they are.
If we want to help Puerto Rico, we should dramatically reduce taxes and regulation there and help build it’s economy: you know, actually reduce poverty. It might just become the Hong Kong of the Caribbean, to the great benefit of everyone. If it wants to join the Union someday, fantastic. But isn’t it time the socialists quit sacrificing their constituent groups on the altar of raw power? And moreso: isn’t it time for the constituents to awaken to the game? It’s a game they never win.
Huffington Post has more on this week’s report, below.
GAO Confirms Statehood Too Costly for Puerto Rico and the U.S.
by Adrian Brito
Huffington Post
April 2, 2014
Granting statehood to Puerto Rico would set back the island’s economy, cost American companies billions of dollars and decrease sources of federal revenues.
According to a new report published by the U.S General Accountability Office (GAO), out of the estimated $5.2 billion in new federal spending Puerto Rico would receive, only a range of $2-4 billion would come back in new revenues for the federal government. However, statehood would mean that every day Puerto Ricans would be saddled with $2.3 billion in new federal taxes that they do not pay today.
The GAO report addressed the adverse impact of statehood on the Island’s finances, stating:
… [a]s a result of statehood, changes to Puerto Rico government spending and revenue could ultimately affect the government’s efforts to maintain a balanced budged… statehood could [therefore] result in reduced Puerto Rico tax revenue. If Puerto Rico’s government wished to maintain pre-statehood tax burdens for individual and corporations, it would need to lower its tax rates, which could reduce tax revenues.
Given Puerto Rico’s recent financial struggles and the government of the Commonwealth’s tough economic reform efforts, cutting almost half of the Island’s budget would be disastrous. GAO also notes that Puerto Rico’s current triple tax-exempt bonds would no longer be exempt from federal taxes, which would make it much harder for the Island to reduce its fiscal woes.
U.S. manufacturers in Puerto Rico, in particular pharmaceutical companies, would also face a higher tax-burden under statehood and the U.S GAO report confirms that many of them would leave. This would put in risk more than 80,000 jobs, plus tens of thousands more government jobs that would be at stake if the local government loses billions in tax revenues under statehood.
The U.S GAO report states:
According to tax policy experts at the Department of the Treasury and the Joint Committee on Taxation, changes in federal income tax requirements under statehood would likely motivate some corporations with substantial amounts of income derived from intangible assets to relocate from Puerto Rico to lower tax locations. The extent to which such corporations might relocate from Puerto Rico is unknown… [however] an alternative set of revenue estimates to account for some businesses with activities in Puerto Rico potentially relocating under statehood [ranges] between – $0.1 billion to $3.4 billon.
Beyond economics, however, it is important to note that Puerto Ricans have rejected becoming the 51st state on each of the four occasions we have voted on the matter since 1967. On November 2012, 1.9 million Puerto Ricans voted on the island’s political status, with only 834,191 (44.4 percent) voting for statehood.
After all, it seems that at its current economic and fiscal juncture, neither Puerto Rico nor the U.S government is in position to consider statehood as a viable option for the island’s political future. It is high time for the U.S. government to help Puerto Rico with economic development and let us decide our own future in a true process of self-determination that includes all sides — not only statehood.
Rod is one of our nation’s leading minds. He’s smart, original, and very committed—a combination that one rarely finds.
Rod Martin and [former Howard Dean campaign manager] Joe Trippi are America’s two foremost experts on online politics.
Rod Martin is a Reaganite-Thatcherite conservative…[and] a man who has spent much of his life ministering to and working for the benefit of others. I know Rod as an advocate for freedom, a leader who understands the real changes we need in Washington, and who has the drive and ability to make those changes happen.
Rod Martin is the kind of dynamic leader who has the knowledge, ability and experience to lead us successfully into the 21st Century. His vision for America is compelling.
Rod Martin literally wrote the book on excellence. Humble yet brilliant, a man of love and compassion, with penetrating clarity he illuminates the world around us, and we are both stirred and enlightened.
Rod Martin is a born leader and an outstanding political mind. Anyone who takes him on is going to have a serious fight on their hands.
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Rod Martin wears with uncommon grace an uncanny ability to link his vigorous faith to the practical challenges of both the business world and the political arena. Yet the respect he shows for others carries a warmth and modesty that are both too rare among those who are strong advocates of feisty positions.
America badly needs more leaders who really get the future. We need more Rod Martins.
Rod Martin is a modern day philosopher-statesman. He is a capitalist intellectual, a conservative iconoclast, a gentle adversary and a kind prophet. He inspires us towards a fresh national vision built upon the original founding principles.
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Rod is one of the sharpest, most gracious men I know, and one of the most gifted political thinkers today. His ability to analyze issues and communicate thoughtful insights on them have earned him the respect of people across the political spectrum.
I am proud to have been Rod Martin’s friend for a quarter century, and I can tell you that he is one of the finest men and most outstanding leaders in our church and in our country today. He has a knack for turning everything he touches to success.
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If Rod Martin represents the next generation of leaders, America has nothing to worry about.
A leader and a servant, in public life and in private, Rod Martin strides at the top of his profession, and has nowhere to go but up. He is in the truest sense of the word ‘outstanding’.
Rod Martin is undoubtedly one of the most accomplished thought leaders today. He is a wonderful mentor, a humble role model, and a deep inspiration for the next generation of scientific innovators and entrepreneurs.
Rod’s achievements pale beside his character and his brilliance. He sees what others can’t. He leads when others won’t.
Rod Martin is one of America’s finest young minds.
