Puerto Rico..economy, statehood

Statehood or Bust?

You’ve probably read about the troubled finances of Puerto Rico, the U.S. territory in the Caribbean that has issued more than $70 billion in municipal bonds, with no visible way to pay out the interest, much less the principal.  Now Puerto Rican have overwhelmingly voted that they want their island territory to become the 51st U.S. state.

Puerto Rico has been an autonomous territory since 1898, when the U.S. forcibly acquired it from Spain.  The territory was granted self-rule in 1952.  Last year, in response to the mounting fiscal crisis, Congress revoked some of the local government’s autonomy, creating a control board that has the power to veto any item in Puerto Rico’s budget.  In light of this forced change in autonomy, on June 11th the territory asked voters to weigh in on the territory’s status.  In 2012, the last time islanders voted on the issue, 61% of voters who made a selection picked statehood as their preferred alternative. In this vote, nearly half a million voters chose statehood on the ballot, compared with just 7,800 votes for independence from the U.S. and 6,800 votes for the status quo territorial status.

However, some are questioning the validity of the vote, since just 23% of eligible voters chose to go to the polls—the lowest participation in any election since 1967.  Part of the low turnout was attributed to the fact that three of Puerto Rico’s political parties urged their supporters to boycott the vote—which, of course, means that the parties claimed that “boycott” soundly defeated the statehood results.

The vote does nothing toward solving Puerto Rico’s fiscal crisis, which has been compared unfavorably to the Greek debt problems.  And even a resounding victory for statehood would have been mostly symbolic. For Puerto Rico to enter the union, Congress would have to pass a law admitting it. Even though the Republican platform of 2016 officially supported Puerto Rican statehood, the Republican leadership would not rush to add two senators and five representatives who would probably, based on Puerto Rican political history, lean Democratic.

Sources:

http://abcnews.go.com/International/wireStory/puerto-rico-gov-upholds-statehood-vote-hit-boycott-47976936

http://www.economist.com/news/united-states/21723149-more-60-puerto-ricans-tell-pollsters-they-would-commonwealth

About Objectively Speaking

Tom Batterman, founder of Vigil Trust & Financial Advocacy and Financial Fiduciaries, LLC is in the business of representing the best financial interests of his clients. Having provided objective, fee-only financial management services for over two decades, he specializes in managing the investment and related financial affairs of individuals and mutual insurance companies who do not have the time, interest or expertise to manage such matters on their own. As an objective, unbiased professional who takes on a fiduciary responsibility to his clients, he guides clients to the financial decisions they would make themselves if they had years of training and experience and the time and expertise to fully research and understand all of their options. Founded in 2010 as an outgrowth of Vigil Trust & Financial Advocacy, Financial Fiduciaries, LLC is a financial management solution for individuals and mutual insurance companies who recognize they do not have the time, interest or expertise to properly attend to their financial matters on their own. While there are many financial “advisors”, most of them have investment products to sell and the “advice” they provide is geared toward getting their clients to engage in a purchase. As one of the rare subset of advisors known as “fiduciary advisors”, Financial Fiduciaries does not sell any investment product so its guidance is not compromised by conflicts of interest which plague ordinary advisors. Prior to his employment in the financial industry in financial advocacy and trust positions, he worked at a private law practice in the Wausau area in the areas of estate planning, tax, retirement planning, corporate organizations and real estate. He is a graduate of the University of Wisconsin-Madison and the UW-Madison Law School and has during his career held Series 7, 24 and 65 securities licenses. A longtime resident of the Wausau, Wisconsin Area, Tom is active in the community. He enjoys golf, curling, skiing, fishing, traveling and spending time with his family.
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