Puerto Rico has voted for statehood in the past, but the island continues to shoot itself in the foot:
Puerto Rico’s government-owned electricity monopoly—known by the acronym Prepa—filed for bankruptcy protection July 2. It did so even though it had negotiated a restructuring agreement with creditors that would have saved $2.2 billion in debt service that could have been used to invest in modernizing the utility.
In a democratic, market economy that would be weird. But Puerto Rico is now run by a seven-member, unelected federal board under the Puerto Rico Oversight, Management and Economic Stability Act, or Promesa, passed by Congress last year. On June 27 that board unilaterally rejected the restructuring agreement, leading the company to declare bankruptcy.
Insanely (emphasis added),
Behind these decisions is a belief that if the commonwealth can clear its balance sheets by giving creditors only a fraction of what they are owed, Puerto Rico’s access to the capital markets will resume. Seriously.
That is, ignore the Promesa Act law, ignore creditors’ rights, don’t cut spending, and hope the Dems will bail out the island and bring it to statehood so the Democratic Party can have two more senators and the corresponding representatives.
While resuming access to capital markets as the country’s largest deadbeat.
Good luck with that, skippy.
Jim Warren says
Puerto Rico is run by a seven member board. This seems very similar to Henry Hazlitt’s description of Uruguay in his 1969 book, Man vs. The Welfare State, chapter 18. Economic malpractice is oft repeated.
Yes – excellent book, too, Jim!