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  • It’s Crunch Time In Puerto Rico

    A commentary by Steve Sherman:

    What to do about the Puerto Rico problem? That question has been bouncing around America for a while now. There are lots of different opinions ranging from a full bailout to changing the bankruptcy laws.

    The problems have been systemic within the corrupt island for a generation. A top heavy government controlled by cronyism and payoffs has crushed the private sector. Most of the entrepreneurs and highly educated people have long since bailed out for Florida. Unemployment, crime, and staggering debt are the norm.

    The problems have mounted turning the tropical island into the “Detroit of the Caribbean”. So what is to be done about it? Letting Puerto Rico sink into the sea is not an option. American Hedge Funds have funded much of the nearly $70 billion and they are scrambling to get on top of a bad situation. A good old-fashioned bailout is a non-starter with our current congress.

    It’s going to take a multi-faceted approach full of hard choices to turn this nightmare into a golden opportunity.

    I’ve long said that Puerto Rico should be the American tourist destination of choice. Beautiful scenery, close proximity to the states, you don’t need a passport to go there, and the fact they use the US dollar all lends itself to being a vacation mecca for stressed-out and work-weary Americans.

    To get to that reality is going to take some work, but it can be done. Hong Kong underwent a dramatic turnaround a few years ago to become a bustling success story. But will they face the problems and make the hard choices?

    The problems begin and end in the power players all looking out for themselves, not Puerto Rico. Congressman Darrell Issa (R) California recently outlined a thoughtful approach to the problems. You can read his plan here.

    What it boils down to is this. There needs to be a strong control board created to force Puerto Rico to change the way it operates so that any relief is a reward for cuts in wasteful spending or streamlining their wayward system.

    Next, hold off the hedge funds. The hedge funds all want a Chapter 9 because then they have a much better chance of getting paid. Sorry guys, you’re in the back of the line.

    That brings me to the Chapter 9. Don’t allow Puerto Rico to do it. Make them work out of this. A Chapter 9 would allow them to not pay their debts and make no reforms, thus perpetuating the problem for future generations.

    Here’s where it gets fun. Require free market reforms. Things like reducing the minimum wage, repealing the Jones Act with controls competition in shipping. Also, reduce corporate taxes and watch a smothered nation bloom like the flowers they are known for.

    The democrats in Washington don’t like this idea. They can’t imagine a flourishing economy here let alone in the depressed island state.

    This is the time for the congressional Republicans to lead with the economic principles they espouse. This is a fantastic opportunity to prove to the world how free market ideas are the only way to prosperity.

    If Republicans hold a firm line and force Puerto Rico to follow the new normal I’ve discussed, then the entire world will watch as the little island is reborn.

    What a unique opportunity? This is the chance to make Puerto Rico the poster child for conservative economic success.

    If the conservatives in congress waiver and go the way of a bailout or bankruptcy or give in to the hedge funds…forget about it. Puerto Rico will suffer under poverty and corruption for another decade until they are back in Washington needing another $100 Billion.

    Now is the time to turn it around in Puerto Rico.

     


    S.C. Sherman

    Senior Editor

    Steve Sherman is an author, popular radio commentator, and former Iowa House candidate. His articles have appeared nationally in both print and online for Townhall, Human Events, Clash Daily, Washington Times, Washington Examiner, Red Alert Politics, Forbes, NRATV and others. All of his novels including his most recent tome, Lone Wolf Canyon, a modern day western that infuriates the left and all "Snowflakes," are available here.

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