An Appeal to Rep. John Ratcliffe: No Bail-Out for Puerto Rico’s Democrat Bloated Bureaucracy

December 6, 2015 ADus and puerto rican flags

Honorable John Ratcliffe
6531 Horizon Road
Suite A
Rockwall, TX

Subject: Puerto Rico’s Request for a Bailout

John,

I came to love and appreciate Puerto Rico while on an extended consulting contract to Enron over 2000 to 2001. My work engaged Spanish-speaking employees of ProCaribe, Inc., as well as local people in and around Peñuelas, a short distance west of Ponce.

Puerto Rico’s Democrat governor and his bloated bureaucracy now look to Congress for financial relief, what I see as welfare for bureaucrats. As of the first of December, 2015, a $355 million payment is due and unpayable.

As one-term Republican Gov. Luis Fortuño says, Puerto Rico does not have a tax problem; Puerto Rico has a spending problem. I agree.

Oppose any bailout. I ask you insist on government reforms instead of providing a bail-out. Our astronomical national debt cannot absorb more debt. Therefore, it seems prudent to me that Puerto Rico negotiate with its creditors in lieu of shifting debt from there to the national treasury.

My Opinion

This U.S. commonwealth is bankrupt and its Democrat government looks to Washington for a bail-out, instead of facilitating economic development that would alleviate and eliminate poverty and enormous unemployment.

Puerto Rico must improve the business climate by streamlining the permitting process, and bychurchill - a nation cannot tax itself into prosperity reducing and simplifying government regulations.

Chief among problems is the bloated government whose employees represent one in four Puerto Ricans. One fourth of all the people on the island work for government thereby imperiling public elections. Too-big government is a danger to all free societies.

For one season, Republican Governor Luis Fortuño began governmental reform by slashing spending by some $2,000,000,000, but a bloated bureaucracy convinced voters to replace him with another Democrat governor and the rest is history.

Points to Consider

  • Creditors include hedge funds, municipal funds, individual investors who have expressed willingness to work with the democrat government to resolve this debt crisis
  • 45% of the 3.5 million islanders live in poverty
  • Federally-funded relief programs discourage workers from seeking jobs.
    • USDA WIC program
    • HUD Section 8 housing supplements
    • HUD SNAP program
    • HUD Community Development Block Grants (CDBG)
    • DHHS Temporary Assistance for Needy Families (TANF)
    • Medicaid
  • Commonwealth government is a bloated bureaucracy and Democrats are unwilling to cut spending
  • Homelessness increased 9% this year, 2015, according to HUD

Democrats there are no different than CONUS Democrats: their answer to unemployment, crime and poverty is always more taxes, more spending, which entails more borrowing. How is borrowing getting the island out of debt?

The commonwealth’s bureaucracy is a welfare state unto itself. With 23.7% of the total (remaining population), bureaucrats are a political party unto themselves.

The Democrat-controlled government ignores the Rule of Law. Walmart was hit with a huge “import” tax on goods arriving from mainland distribution centers. Subsequently, Walmart filed a federal lawsuit against the unconstitutional Act 72 that levies the tax. Walmart will prevail. A lawless republic cannot survive.

No Preference shall be given by any Regulation of Commerce or Revenue to the Ports of one State over those of another: nor shall Vessels bound to, or from, one State, be obliged to enter, clear, or pay Duties in another. – Article I, Section 9, paragraph 6

The U.S. Navy was a major employer, but the anti-US factions campaigned to make it go away. This I know from the extended period of time I worked on the main island. I would see banners, graffiti and bumper stickers that said “Fuera Marina” (Navy, go away) and another with the background of our common flag saying, “Es Su Bandera También” (It’s your flag, too). The anti-US gang won and the Navy is gone along with a huge source of revenue and employment.

The CIA World Factbook attributes “help” from our federal government for the bulk of misery on the island today.

  • The [2006] down-turn coincided with the phase-out of tax preferences that had led US firms to invest heavily in the Commonwealth since the 1950s.
  • Unemployment reached 16% in 2011, but declined to 13.7% in December 2014. This was due to an exodus of job seekers who left for the mainland.
  • US minimum wage laws apply in Puerto Rico, hampering job expansion.

Resources and Hope

High value, high quality, laborers and professionals have left behind their birthplace for opportunity on the mainland. Imagine a situation where the best and brightest choose to make their living on the island.

The island was once home to industries due to federal and local tax incentives – corporate welfare. When the welfare ended, industries left for the mainland or elsewhere.

Can Puerto Rico be restored as an economic powerhouse? Consider history of the island paradise. Capital city of San Juan was founded in 1521 by Juan Ponce de León, who named it City of Puerto Rico (Rich Port), forty-four years before the founding of San Augustine, Florida, the oldest European settlement on continental U.S. soil. Four hundred ninety-four years later on, Puerto Rico survives and holds great promise, if strangulation by bloated government can be overcome.

The Rule of Law must prevail for Puerto Rico to realize her potential.

There is no substitute for free-market principles. Puerto Ricans are generally intelligent and creative people who can make the commonwealth a model of prosperity, if given the freedom they need. Puerto Rican leaders now live in every state of the Union where they are the second largest minority population. Let’s give them a chance to save Puerto Rico from becoming a welfare cesspool.

John White
Rockwall, Texas

2 thoughts on “An Appeal to Rep. John Ratcliffe: No Bail-Out for Puerto Rico’s Democrat Bloated Bureaucracy

  1. I had a contract to furnish PR w/fuel for their power plant (out of date) that furnishes power for the entire island…guaranteed by the U.S. government..if they could furnish 20% cash…they could not do @ all! Our government is paying an outrageous price entirely for all the costs w/no takers!

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