On Thursday, the Democrats and Republicans in the U.S. House of Representatives announced a bipartisan bill that would allow Puerto Rico to declare bankruptcy. It helps creditors because it prevents them from resorting to costly lawsuits in order to get their money, and also means that the owners of the debt receive less than 100 percent of what they owe.
Most importantly for U.S. politicians, the bill does not require the spending of any federal money. There is no substantial help to the island, but instead focuses on guaranteeing creditors their money.
Currently, Puerto Rico has a total debt of $72 billion and private fund holders demand that Puerto Rico cut public services to pay back creditors. The poverty rate has reached 45 percent with a 13 percent unemployment rate, which is more than double the U.S. average. In addition, 40 percent of households with minors receive food stamps. The dire conditions have led to an exodus of people out of the island and into the United States looking for employment and stability — an act that has diminished Puerto Rico’s tax base.
At this point, Puerto Rico will default on their debt payments because the island is not allowed to file for bankruptcy and discriminatory laws prevent it from restructuring the debt. The mainstream media, in its reporting, fails to highlight that the situation Puerto Rico finds itself in is a product of U.S. imperialism, which has manifested itself as colonialism on the island.
Why does this matter to progressive and revolutionary people? Puerto Rico is experiencing one of the biggest crises in the history of the island with mass unemployment and poverty that doubles that of the poorest U.S. state. The island has been in a deep economic recession for over 10 years, and a solution has been to increase taxes and cut social services. Most recently, Puerto Rico has closed 10 percent of schools and laid off thousands of public service employees.
Puerto Rico lacks independence – it is left at the whim of U.S. financial institutions and their interests while the government simultaneously refuses to provide the island any relief.
Colonialism puts Puerto Rico in a bind
As socialists, we need to understand how the United States created this debt crisis as a colonial empire so that we can defend the island from media attacks and further austerity cuts.
Puerto Rico was militarily invaded in 1898 after 400 years of colonialism under Spain and transferred to the United States as a colonial “spoil of war.” In 1917, President Woodrow Wilson signed the Jones Act, which gave Puerto Ricans American citizenship and requires Puerto Rico to buy goods strictly from American-made ships with an American crew.
While this may sound like a decent situation for Puerto Rico, there are many omissions and drawbacks.
- Puerto Ricans cannot vote as long as they live in Puerto Rico
- Puerto Rico does not receive the same federal funds as states
- Demanding that imports come from American ships leaves Puerto Rico subjected to inflated prices
- The U.S. government can stop any legislation put forth in Puerto Rico
Additionally, in order to promote investment on the island over the years, various tax programs have been introduced to incentivize foreign corporations to enter the island. For instance, there was a tax exemption program for over 50 years that was reintroduced in the form of tax cuts in 2008.
Basic human and social services, such as healthcare and affordable housing, have always been lacking in Puerto Rico, and all of this has become exasperated by the debt crisis and increasing austerity cuts. The debt crisis and their colonial status cannot be separated.
Austerity is not a solution – cutting public services is not a solution nor closing schools and firing teachers. Why should the Puerto Rican people suffer because a tiny group of millionaires cannot make the profits they want?
In the service of the big banks, the U.S. government is hypocritically picking and choosing when to exert power in Puerto Rico. It has benefited from the island’s resources – both natural and the people’s labor. It’s capitalist class has profited from this – Puerto Rico has helped make the United States the richest country in the world. The fact that investors could not make the profits they expected caused the financial crisis, and the solution is to cut services that benefit working people. This is capitalism. When an economic crisis gets out of hand, the solution is to cut services and reforms that progressive people and revolutionaries fought for and defend. It’s a mechanism that ensures the multi-millionaires continue fattening their pockets.
This entire process highlights how Puerto Ricans have no right to self-determination and no say in how foreign corporations and investors interact with their economy. The United States dictates all of this, it dictates how resources are depleted from the island for the sake of profit. Otherwise, how could we explain the fact that investors get tax breaks meanwhile taxes increase for a populations experiencing over 12 percent unemployment? Let us also remember that the 12 percent unemployment is a deceiving number because it does not include people who have stopped looking for work or people who are incarcerated.
How much more can they rob from the island? What if the working people of the U.S. and Puerto RIco demanded their money back after the Wall Street bailout in 2008? The people certainly did not see tangible returns on that investment although politicians claimed the opposite.
Bernie Sanders has called for helping Puerto Rico build a sustainable economy. This goes well beyond what other presidential contenders have offered, but it still assumes that Puerto Rico will remain in the hands of its colonial oppressors. Puerto Ricans should determine their own future, not an empire that has no interest in the island and its people, only its exploitation.
The greatest act of solidarity we can demonstrate to the Puerto Rican people is to create a multi-national socialist revolution in the United States – a revolution that would recognize Puerto Rico’s independence and pay reparations for the historical injustices. The fight for socialism cannot be separated from a militant struggle for independence.
Que viva Puerto Rico libre y socialista!