~~June 23, 2015~~
13 THINGS YOU NEED TO KNOW ABOUT THE CRISIS IN PUERTO RICO
Any Latino on social media knows one thing:
There’s a crisis in Puerto Rico.
Headlines about the island’s almost decade-long recession, credit rating cuts and its residents’ mass migration into the U.S. mainland, fill Facebook newsfeeds, Tumblr dashboards and Twitter timelines alike.
It can be difficult to keep up, especially when this news involves complicated issues like taxes and investments. To help keep you in the loop, here’s 13 things on the critical matters happening right now on that tropical island just 1,150 miles from Florida’s waters.
1. Puerto Rico is struggling to emerge from its recession. While the rest of the U.S. is experiencing economic growth, La Isla del Encanto has not been able to draw itself out of a 9-year recession. The U.S. territory has a 15.4 percent unemployment rate, with per capita income around $15,200 (that’s half of Mississippi’s, the poorest state in the U.S.).
2. This harsh economy is pushing thousands off of the island every year. Puerto Rico is experiencing the largest migration wave since the 1950’s. Rampant crime and a dwindling economy have pushed so many people out of the island that, for the first time in history, there are more Puerto Ricans living in the U.S. mainland than there are on the island.
3. Economists fear that this mass migration leaves little hope for the island’s economic recovery. Orlando Sotomayor, an economist at the University of Puerto Rico, told the New York Times that “the phenomenon is highly uncommon and underscores the lack of hope that the ship can or will be righted.”
4. The Caribbean island is more than $72 billion in debt. To put that in perspective, this is the U.S.’ third-largest municipal debtor, behind California’s and New York’s, though the island is both significantly smaller and poorer than both states.
5. Another major difference: Puerto Rico, unlike U.S. cities, cannot file for bankruptcy. To restructure debts, Puerto Rico must negotiate with investors.
6. Standard & Poor’s, a U.S. financial services company, slashed Puerto Rico’s rating to B, a non-investment grade. This has essentially frozen Puerto Rico out of the bond market. Over the last few years, investment companies like AllianceBernstein have sold their Puerto Rico holdings, with others hesitant to invest without a signpost of increased revenue.
7. The recent passing of a sales-tax bill can be that sign. Unfortunately, while the 4.5 percent hike in sales tax is expected to bring in $1.2 billion in new revenue, and generate more investments for the island, it’s bad news for the people of Puerto Rico, especially the poor, who will now have to pay a whopping 11.5 percent sales tax.
8. In an effort to pay the island’s utility investors, Puerto Rico is negotiating a restructuring of its public power company. The plan, which is likely to be approved by the end of the month, would definitely increase the electric rate for the island’s residents. Critics of the overhaul, like Puerto Rico’s delegate to Congress, Pedro Pierluisi, believe the increase “will not benefit anyone.”
9. Puerto Rico’s Gov. Alejandro Garcia Padilla also planned to implement a $166 million cut to public university budgets, but the decision was later reversed after thousands of Puerto Rican students protested the proposal. Go, millennials!
10. However, there still remains a healthcare crisis on the island. The Center for Medicaid and Medicare services will soon execute an 11 percent cut in Medicare Advantage reimbursements, which will cost Puerto Rico’s health-care system nearly $500 million. About 60 percent of the island’s population relies on Medicare, Medicare Advantage or Medicaid to pay for their health care. Last month, the Washington Post reported that doctors practicing in Puerto Rico are forced to get by with much smaller Medicare and Medicaid reimbursement rates than those received by others on the continental U.S.
11. Puerto Rico’s recession has also injured the island’s housing market. According to Fox News Latino, call for sales are expected to be just 15 percent of what they were a decade ago. President of the Puerto Rico Home Builders Association (ACH), Roberto Trapaga, said “when the time comes to buy a house, people don’t have the money,” adding that banks, which have also been hit by the crisis, have tightened the requirement to obtain a mortgage loan.
12. Whether Puerto Ricans own a home or not, water-rationing measures in San Juan have left thousands of islanders without water. The measures, imposed because of an ongoing drought that has lowered Puerto Rico’s main reservoirs, have limited access to water to just every other day for more than 160,000 people living in and near the capital.
13. Good news (kinda): Puerto Rico’s tax hikes and budget cuts are expected to assuage the island’s economic woes. Writing for NPR, economic reporter Greg Allen reminds us that both New York City and Washington, D.C. saw similar fiscal problems and eventually found stability. Unfortunately, fiscal recovery for both cities also brought along with it the process of gentrification, which has displaced much of the areas’ impoverished communities of color, a fate we are already seeing in Puerto Rican barrios like Santurce.
“As it appears in …. full and total credit of information and main graphic”
#LAB ProLib #CrisisInPuertoRico #SomeFacts #DecadeLongRecession #LaIslaDelEncanto #HarshEconomy #LargestMigrationWave #RampantCrime #DwindlingEconomy #MassMigration #CaribbeanIsland #CannotFileBankruptcy #Puerto RicosDelegateCongress #PedroPierluisi #GovAlejandroGarciaPadilla #HealthcareCrisis #HousingMarket #WaterRationingMeasures #Gentrification
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~Puerto Rico’s Financial Crisis: Is The Island The New Greece?~
~Published on Mar 12, 2014~
The island is in dire financial conditions and it is thousands of U.S. mom-and-pop investors that might lose a big part of their savings if the small territory goes bankrupt.
We ALL are ONE!!
I found his very informative, but I disagree with the final point #13: “Puerto Rico’s tax hikes and budget cuts are expected to assuage the island’s economic woes.”
That is a conclusory statement, not borne out by any of the antecedent facts.
In fact, the tax hikes and budget cuts are already causing great HARM to the people of Puerto Rico, and INFLICTING economic woes rather than “assuaging” them.
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Thanks so much for your input. Always appreciated, stand corrected …. stays on record here. Never knew all that I’ve learned since I read your book.
Please, let me know when you make it to Orlando. Abrazos sinceros!!
Dr. Rex, thank you so much for visiting my site and commenting there so often! You are my greatest and most valued reader…I really thank you! I always love seeing the Dr. Rex icon…it is always a visit from a friend. I really appreciate it.
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Nelson, the honor is mine! I visit your site bc it’s as well written & documented as your book.
I already received the autographed copy from my nephew! Thx so much …. I also saw the short video he took. Again, my honor!
It is sad that the island I was born and raised in is in such a disaster. We want change but do nothing to change things. We don’t want uncle Sam to come in and tell us what to do, yet we don’t take the initiative to resolve our own problems. I’m my personal opinion the problem begins in how we elect our government we are taught to follow the political party not by there ideas and agenda for the improvement of the island but by who our predecessors voted for. They put the pride of the political party ahead of there agenda. Please let’s change this let’s vote not popular o PNP let’s vote smart for the sake of our children and our island. Let’s put political party pride aside and unite for the revival of our economic status and the welfare of our people!
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I was born & raised on the Island too. I’ve been away since 1999. You are right about the way things are & have been there …. you voted along party lines.
I think your solution applies to many countries too. That’s the smart way of voting ….. The gov has also made it difficult to do bc there’s always been a third option. Reminds me of divide & conquer. I wonder if we are able to unite for the sake of Puerto Rico future. I wonder if this could be possible.
Have you heard about a book called “War on All Puerto Ricans”? I highly recommend it. It’s the real, well documented history of PR.
This will explain why your suggestion may not be feasible.
Thx for stopping by & leaving your comment. Deeply appreciated!, Gilberto. Paz …
I find this issue fascinating, born in NY I knew little of the Islands political or economic issues. Having traveled there last year I saw how beautiful and in need of help my ancestral island is. I will be picking up the “War” book that brought me to this page. Thank you for the info
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Hi, Miguel … it’s makes me very happy that you stopped by. I was born and raised in PR. Now I live in Florida … sometimes I travel home for vacations.
I’m glad that you will be picking up the “War” book. It has been Amazon’s best seller for the last 3 months.
I have read it twice. It’s taught me so much about PR …. so many things that I didn’t know. A friendly warning … you may be upset about the way “our benefactor” has treated our country,
I suggest that you search through this link …. to the book ….
You won’t be happy about was our country has gone through ….
This are two of the most recent post I’ve seen ….
I would like it if you keep me posted after you read the book and this blog.
Peace … Puerto Rico!! 🙂
Puerto Ricans, just as Americans on the mainland have increasingly voted for those that promise them free stuff (just like Greece). In short they have coveted what they have not earned…this is greed. Then the people are shocked when these elected politicians turn out to be crooks who siphoned the money & increased power for themselves. The only thing greedier than such an electorate are the politicians they vote in. It’s no different than hiring a burglar to plunder your neighbor’s house but instead get’s their own house robbed. What happened to my people who believed in standing on their own two feet and would not accept what they did not earn, but would take the shirts off their backs to help their neighbor? Sadly this group is not the majority as election results have demonstrated. Now its all about gaming the system & being “listos”. They increasingly view themselves as victims and entitled while the burden of fixing is viewed as someone else’s responsibility. Same thing is happening in the mainland and if it continues there will be no one to bail out PR. There’s no such thing as “free”…..
Much love to all and respect to those that remain in PR and live with pride, integrity, honor and true service.
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You got that right!!
Have you heard about this book that has been the top seller in Amazon for the last 3 months? It’s called “War on All Puerto Ricans” ….
The author has a blog …. Here’s the link.
I found the book to be very educational and incredibly researched, It’s taught me a lot about the relationship between the US and PR. I recommend it ….
Thanks for stopping by and leaving your comments. Appreciate it. Paz …..
I live in the island and things here are not getting any better. We are struggling to survive. We are all affected in one way or another and is a shame that our health care gets cuts and we wont be able to get the proper care we all deserved. With the new IVA what is going to happen everything goes up but our income is not enough. I believe that there are people employ with the gobernador that there salary needs to be look into bec they keep living the life while we suffer. I also love metaphysical topics and I hope that we can all put our energy with positive decretos to help our island.
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Wanda … Thx for stopping by! Your comment is so true & very much appreciated! I’m baffled by the way things are in our “tiny piece of land”. I can just imagine.
If you haven’t heard, I would recommend that you read a book called “War on All Puerto Ricans” by Nelson A. Denis … that’s how it all started.
There’s also a blog on it …. I’ll get you the link a bit later. Sending energy your way!!
As promised …. check out this link …. it will provide you with very accurate, mind-blowing information!
I also came across this post … from “Repeating Islands” blog ….