Profligate Puerto Rico’s Problems So Possible to Predict – The Wall Street Journal (July 9, 2015)

Regarding Daniel Hanson’s “Profligate Puerto Rico on the Brink” (op-ed, June 30):

As a percentage of gross domestic product, combined commonwealth and local spending for 2011 (the most recent year with full data) was approximately 11%. Using data from the same year, Puerto Rico would be the lowest spender among all 50 of the U.S. states.

Moreover, for those led to believe that government workers are generally overpaid, consider that the average salary for a public-school teacher in Puerto Rico is $32,000, also the lowest in the U.S. One arguable exception is the pay of Puerto Rico’s legislators, who generally make about $75,000, but this pay is exceeded by their counterparts in Pennsylvania and New York. Finally, over the last decade, Puerto Rico has drastically cut its government labor force such that it would rank 37th among the 50 states including the District of Columbia in per capita government employment.

The second issue concerns the tendency of those analyzing the island’s crisis to ignore a central cause: Puerto Rico’s failed economic-development strategy based on tax exemptions for uncompetitive activities.

To resolve Puerto Rico’s crisis, we will need more (not less) government investment to improve the quality and efficiency of public services and infrastructure. But more important, we must debunk the entrenched mindset that blocks us from realizing Puerto Rico’s enormous potential as a world-famous tourism, entertainment and professional sports venue.

David R. Martin


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