PR Statehood’s 18 trillion dollar problem

Much has been written and said about Puerto Rico’s debt problem.  Gross mismanagement, corruption, fraud and public sector union abuse have created a spending problem so large that it will take decades for Puerto Rico to get out of debt. That’s just 73 billion dollars or as high as 150 billion if you include all unfunded mandates.

While statehood is an appropriate and just solution to the island’s status question and it brings many benefits including congressional representation and the presidential vote, it has another debt problem that most statehood supporters avoid discussing: the looming U.S. national debt.  That debt (if the current numbers can be believed) is now in excess of 18 trillion dollars.  Total U.S. debt (not including unfunded liabilities) is over 61 trillion dollars.

According to unfunded liabilities for the United States exceed 93 trillion dollars.  That is just shy of the total value of U.S. assets.  For some perspective, the total amount of wealth created around the world (excluding the U.S.) in any given year is about 60 trillion.  In other words the American nation owes more money that the entire world creates in one year and has made promises to pay for things that would require the mortgage of the entire country to actually pay.

As Puerto Rico enters a phase in which it cannot get anymore financing and has to start cutting programs (which it should have done years ago) it offers us a glimpse into what the future holds for the United States and all of its territories.  Cutting hours of public employees and cutting back on a few non-essential functions is just the start.

The U.S. will someday face a similar situation where they can no longer borrow money and monetizing (printing money out of thin air) will no longer function.  Inflation and devaluation of the U.S. currency will drive prices up and buying power down creating a depression of near biblical proportions.  The U.S. will no longer be able to afford many of the social welfare programs that are often used to entice people into voting for statehood.

It also means global instability.  The U.S. can barely afford its massive defense spending right now.  This in the face of a growing threat from China and Russia.  China is rapidly and massively building up its armed forces and expanding its area of control to international waters, even stepping on its neighbors sovereign rights to exclusive economic zones in the South China Sea.

Recently China announced it was building a drone fleet of more than 40 thousand UAV’s.   It has also added aircraft carriers, mid ocean man-made island bases and a host of ‘carrier killer’ ballistic missiles, not to mention rapidly expanding its submarine fleet.   All of this very openly challenging the United States.  If the U.S. has to drastically reduce its military due to its debt, China, Russia and rogue nations like North Korea and Iran (not to mention a host of African and South American wanna-be dictators) will be able to run riot across Asia, Africa, South America and the Mid-east.

This will lead to even more economic turmoil in the world.

If a conflict between the United States and China over Taiwan or the South China Sea goes into a nuclear phase, Puerto Rico as a state or territory will be on the target list.

Most statehood advocates avoid even discussing the problem of the national debt or the problem with China and Russia.  There is good reason for that.  If we look at all that statehood implies it becomes just as risky and dangerous as Independence.  However, to be fair to the people of Puerto Rico; the statehood party should address the national debt and national defense issues.

When it comes time to make the final choice, that choice should be fully informed of the potential consequences of each alternative.

***NOTE: Please, consider buying one of my books which will help this blog reach more people.  Toy Farm Lemonade, The Beagle and the Dolphin and A Puerto Rican Manifesto and my latest piece ‘Life lessons from driving lessons‘ are all available today at Amazon Kindle.

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About worleyf

Semi-retired Media Relations guy, former radio and TV reporter and legislative aide. Middle of the road Libertarian (as if that actually existed) who reviews current news items and stories, and offers an alternative point of view.
This entry was posted in Economy, Puerto Rico, Status and tagged , , , , , , . Bookmark the permalink.

One Response to PR Statehood’s 18 trillion dollar problem

  1. Pingback: UPDATE: Statehood’s 210 Trillion dollar question | Conservative News and Views on Puerto Rico

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