Puerto Rico’s Economy March Madness |
March 18, 2013
“There are worse fates than to be forced to live in Puerto Rico for half the year. But for millionaires and even billionaires, like Paulson, it may not be worth it. The political, economic, and social conditions down in Puerto Rico are extremely unstable and may not be the best bet in the tax game.”
“Now the bond market gatekeepers, – credit ratings agencies – are waving the red flag. Yesterday Standard & Poor’s downgraded the Commonwealth of Puerto Rico to BBB- (one tiny step before junk status) and followed this downgrade with one of the island’s Government Development Bank to BBB-. This is ominous. The GDB is the heart of Puerto Rico’s borrowing system.”
For the opposition, the New Progressive Party’s leader, Pedro Pierluisi, met with Gov. Garcia Padilla and agreed to launch a joint effort at lobbying Congress to both counter the looming spending cut’s effect on Puerto Rico and increase Medicare parity for those on the Island. The two also agreed to push for a new (federal) tax break aimed at companies who invest and move their operations to Puerto Rico. If enacted, the federal tax break could bring back the days of multi-nationals investing and creating jobs in Puerto Rico, but many doubt Congress will act on it at a time of massive fiscal deficits. That said, Pierluisi’s and Garcia Padilla’s meeting is as close as cooperation between the two parties is going to get for the time being, a divisiveness that continues to hurt Puerto Rico in the long run.