7 reasons why the COVID-19 stimulus package is not a ‘gift’ for Puerto Ricans
After weeks of deliberation and uncertainty, the current administration recently announced that direct cash payments to combat the economic effects of the COVID-19 pandemic will also apply to many low-income residents living in Puerto Rico, a modern U.S. colony in the Caribbean. While the news evokes reminders of how Puerto Ricans have been systematically denied the right to develop a sustainable economy or recover from natural disasters, it hasn’t stopped some in the U.S. and Puerto Rico alike from making tasteless insinuations and comments referring to the stimulus package as a “gift” from president Trump to Puerto Rico. Comments like these however couldn’t be farther from the truth. Here’s seven (7) reasons why this stimulus package and any transfer of federal monies are NOT gifts to Puerto Ricans, but rather owed payments that are long overdue.
#1. “American Citizenship” and the making of the colonial subject (Jones Act of 1917): Almost twenty years after the Spanish American War (1898) that ceded Puerto Rico to the U.S. as a bounty of war, an artificial currency devaluation of aproximatley 40% affecting all accrued wealth, capital and possibilities for economic growth on the island for years to come, along with the despotic deviances of U.S. military rule, Puerto Ricans were rewarded with a limited form of “citizenship” via the Jones Act of 1917 for their adherence to classical colonialist policies. The act established among several things, unrestricted travel between the United States and Puerto Rico, and islandwide exemption from federal taxes! Sounds pretty good, right? But there’s a catch! Under the same regulations, insular Puerto Ricans were then drafted into fighting U.S. wars, but denied the right to vote for the U.S. president or voting members of Congress. Given that this imposition lacked the most essential attribute of citizenship --the right to elect a sovereign-- Puerto Rican’s “U.S. citizenship” aggravated and complicated colonial rule over the island’s inhabitants.
#2. Shipping Oligopoly (Jones Act of 1920): Three years after cementing colonial relations via the Jones Act of 1917, the Merchant Marine Act (1920) was also imposed, denying Puerto Ricans the right to trade using foreign vessels, thus raising prices on virtually all goods and services on the island for over 100 years and denying it the possibility of becoming an international shipping and commercial hub using its advantageous geographical position. The result of these two laws has been the development of a dependent economy, disconnected from the rest of the world, which is prone to crises and has no political means to confront the powers that like to keep it that way. Which brings us to reason #3, Corporate Welfare!
#3. Corporate Welfare: Following WWII and Puerto Rico’s colonial constituent assembly (1950), development plans ensued to try to industrialize the impoverished U.S. possession. But with limited possibilities for trade and virtually no ways of pressuring the U.S. into changing this reality, insular elites were left with no other option but to do what they do best: beg. The U.S. responded with amendments to the 936 section of the U.S. tax code that exempted U.S. corporations from various taxes if they moved their operations to the colony. While the measures attracted plenty of high-paying jobs in the pharmaceutical sector, they did little to develop the island’s economy as the strategy relied solely on the permanence of that U.S. tax code being alive. When Congress changed the arrangement, companies left to other countries with access to the U.S. market through trade agreements but not the costs imposed by laws such as the Merchant Marine Act. Puerto Rican governing elites were then forced to indulge in unsustainable bond emissions to make up for the lack of tax revenue. And as every politician wished to leave their budget balanced, debt would accrue for future administrations to deal with. U.S. corporations however were able to take a whopping $30 billion dollars a year in revenue from the island while the island’s public institutions continued to scramble for cash to maintain basic operational costs. The result has been a $73 billion debt, or a little over $20,000 per every newborn. What were they saying about a stimulus “gift” again?
#4. Vulture Fund Speculation: As debt accrued from unsustainable bond emissions, Wall Street caught on quick. And several credit downgrades later, BOOM! Vulture funds flew in to buy up our debt for cents on the dollar, exerting pressure on Puerto Rico’s government to pay what they were never given the opportunity to make. The least we should be getting is a “stimulus check”!
#5. Chronic Poverty, Unemployment, and Low Wages: Have you ever heard Mississippi pride itself on being the poorest state, or Louisiana for having the most food-stamp recipients? If Puerto Rico were to become a state, we’d beat them both! With over 1.3 million food-stamp recipients (roughly 40% of the population) and a medium income that barely breaks the federal poverty line, Puerto Rico has few means of creating an effective tax base to solve its problems (see #1 and #2 above). While on occasion, technocrats will pride themselves on federal grants or congressional pork they’ve begged for, it’s never enough. $1,200 dollars a person will barely serve as a patch for the effects of the COVID-19 outbreak, let alone to mitigate our colonially induced economic woes.
#6 Access to healthcare: Imagine that there is a good public health system. Now imagine a pro-statehood administration, trying to be like in the U.S., privatizes it almost completely and makes it inaccessible to its most vulnerable recipients. Now, imagine that these recipients pay their fair share of Medicare and Medicaid dues but are provided less coverage than the rest of the U.S.! Now, to add insult to injury, imagine that there was an even greater shortage of doctors and nurses in the country given that other countries pay them better. You’ve just imagined Puerto Rico! But healthcare professionals aren’t the only ones leaving…
#7. Attracting our best and brightest: Due to the island’s colonially induced depression (two decades strong!) Puerto Rico is suffering the largest continual migration wave to the U.S., taking most of our talent with them. This seemingly never-ending brain drain has caused irreparable harm to our economy and our possibilities for success, as people that would generally generate more income and jobs on the island are not contributing to the Puerto Rican economy in any way.
All things considered, Puerto Rico needs much more than a “stimulus package” to survive economic, environmental, and health crises. It needs reparations for 122 years of colonially induced poverty, dependency, and underdevelopment that has robbed its inhabitants of a future. This, however, will only happen when Puerto Ricans and Americans alike realize the need for a prosperous path forward outside of paternalistic policies, and organize and demand that Congress and corporate culprits take responsibility for bleeding the island dry.
Author Jenaro Abraham II is a Diasporican academic, born in the American South and raised in Puerto Rico. After receiving his MA in Latin American History at the University of Puerto Rico, Río Piedras Campus, Jenaro went on to pursue doctoral studies in Political Science at Tulane University in New Orleans, Louisiana. Jenaro currently tweets from @JenaroAbraham.