Faced with the failure of the State and with it the ability to finance populist measures, there is no other route than to build a society and an economy based on entrepreneurship and business initiative. Individual freedom and the promotion of self-effort as guiding principles of a new socioeconomic model supposes a complete reengineering of the prevailing thought during the second half of the 20th century and so far in the 21st century.
For those of us who have spent years navigating the tortuous planning and permitting process on the Island, it is obvious that there are anti-development visions and forces, of government leadership and with little respect for the right to use and enjoy private property. This vision permeates multiple laws and regulations, including the Land Use Plan. The timidity of our rulers and the lack of a firm public policy for economic development, articulated and based on science, not on electoral fears or on social networks, permeates even the desks of the officials responsible for the evaluation and granting of permits.
In today’s difficult labor market, it’s important that we remove unnecessary red tape. State legislatures may have good intentions when they pass licensing laws, but they make it more difficult for people to enter professions or start businesses. State governments shouldn’t be making matters worse with unnecessary barriers to opportunity.
Now that Puerto Rico is out from under the crushing weight of gigantic debt, where is it headed? Will it get deeper and deeper into dependence on federal funds, or will it revive economic growth through job-creating private investment? As Heidie Calero, for many years one of Puerto Rico’s top economists, put it in a recent column: Is it Operation Handout or Operation Bootstrap?
In recent days there have been events that illustrate reasons why there is no climate conducive to development and help us generate wealth. We live in a society plagued with obstacles to the free exercise of economic activity, which makes it difficult for Puerto Ricans to become protagonists of their economic activities and promoters of benefits for all.
A well-known feature of the Puerto Rican economy, both at the government and individual levels, is its heavy reliance on federal funds. Over the years this dependency has increased considerably for both of them. Thus, Puerto Rico ranks fourth among all jurisdictions with the greatest dependence on federal funds for its tax revenue, with the state of Louisiana ranking first
History shows us that freedom and prosperity go hand in hand as the human spirit thrives on virtuous liberty. The proven path to preserving and enhancing opportunity, prosperity, and individual well-being is the path of freedom.
The COVID-19 pandemic no more redeemed or justified statist policies than other crises past generations of politicians exploited to advance them, from the Great Depression to the Great Recession to the harrowing disruptions globalization visited upon America’s blue-collar communities. Free enterprise is not the cause of these challenges—it’s the solution.
It is time to revitalize the system that made America the world’s economic colossus, won the Cold War, and moved billions out of poverty world-wide, including hundreds of millions in China. No nation will ever be as productive as the U.S. while the American economy is powered by limited government, economic freedom, and free markets.
The plan of adjustment and Puerto Rico’s exit from bankruptcy is a welcomed development. However, without structural reforms and changes to the political culture towards confidence in free individuals, the Commonwealth will probably become insolvent within a decade. In light of this experience, policymakers in Capitol Hill should begin preparation for another PROMESA.