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Trading  | June 10, 2017

Via The Daily Bell

Secession has been a hot topic lately from Brexit, to Catalonia, to California; so why is Puerto Rico voting on statehood tomorrow?

It is a non-binding referendum which asks Puerto Ricans if they would rather the territory remain as it is now, become an American state, or go entirely independent. But some say the election has been rigged for the pro-statehood group.

And indeed, they seem to have the most power right now. The big fish in a small pond are seeking to form a delegation of two “Senators” and five “Representatives” in order to lobby Congress to admit Puerto Rico as the 51st American State. Puerto Rico already has a Congresswoman who goes to DC, though she is not a voting member. Go figure she supports statehood, as someone who has the most to gain from it.

But the real reason many Puerto Ricans see statehood as appealing: the territory is bankrupt. Somehow it only took $73 billion in debt (about $20,000 per capita) to bankrupt Puerto Rico, as opposed to close to $20 trillion in debt (over $60,000 per capita) the U.S.A. holds. (Puerto Rico cannot simply print more money to pay their debts in inflated currency as the U.S. does–a back door tax.)

Yet becoming a state would give Puerto Rico access to federal cash, since the federal government hands out funds to states in order to manipulate their policies, and gain allegiance.And why shouldn’t a government with triple the debt per citizen help out Puerto Rico? America has a magic protective shield around its finances; America’s chickens will never come home to roost. Totally makes sense to bring more bankrupt states into the fold, why the hell not?

And why shouldn’t a government with triple the debt per citizen help out Puerto Rico? America has a magic protective shield around its finances; America’s chickens will never come home to roost. Totally makes sense to bring more bankrupt states into the fold, why the hell not?

Some claim that Puerto Rico becoming a state would make it a better place to invest, as Americans wouldn’t see it as scary and foreign. They are wrong. Puerto Rico becoming fully subject to the taxes and regulations of the U.S.A. would absolutely make it less appealing than it is currently. Puerto Rico currently has a 4% income tax rate, and most investment income gets a full exemption from taxation.

If the Puerto Rican people were smart, they would vote for independence. Why would you subject yourself to a higher tax rate, which would only hurt the already touchy economy? Why would you scare away investors and businesses, and submit yourself to an even more debt-riddled government, with more restrictions on the freedom to live, work, and earn how you choose?

At a time when territories are rightfully asserting their independence from larger imperialist governments in order to have more control over the local issues which affect them, voting for statehood is a step backward for Puerto Rico.


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