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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: elmatador who wrote (118895)	5/7/2016 4:02:49 AM
From: Elroy Jetson	Respond to of 218018

Puerto Rico is a Congress created problem. If Congress really wanted to make Puerto Rico like the United States they need to be a state with full representation. But they don't want to do that for a whole lot of reasons. So they created tax-code advantages for pharmaceutical firms to locate in Puerto Rico, just as Ireland created tax-code reasons for Intel to locate in Ireland. But what you want to attract are businesses which want to be in Puerto Rico or Ireland for multiple organic reasons. Tax-code advantages tend to be will-o-the-wisp, with someone else eventually willing and able to offer a better deal some place else. In the interim the businesses have required and encouraged infrastructure investments, which suddenly cannot be paid for once the businesses there simply for the tax-code advantages leave. And that's where Puerto Rico and to some extent Ireland is right now. Congress could fix the niggles in the tax benefits, but again this is not a long term solution. And the debt payments for the infrastructure stimulated by the businesses which have already left need to made today. Of course Congress also holds the power to say whether Puerto Rico can default, and they also don't have the same rights and protections as States do in defaulting on debt. So Puerto Rico's problems are created by Congress and can't be fixed by anyone but Congress - but of course they're pointing their fingers elsewhere rather than deal with the mess they created. This sort of slipshod behavior by the person holding the leash is what created the American Revolution, with Congress now playing the part of King George in this scenario. But it will have to become a major problem financially for political donors owed money before Congress acts, because we have the best Congress money can buy.