May 7, 2016

Laffer Associates On PROMESA

PROMESA Is The “Right Model.” “It would create a financial control board to take charge of Puerto Rico’s finances and budget affairs.  This is the right model.  It helped Washington, DC recover economically when it was in a similar stage of financial crisis.” (Dr. Arthur B. Laffer & Stephen Moore, “HOW CONGRESS CAN SAVE PUERTO RICO FROM INSOLVENCY,” Laffer Associates, 5/4/16)

  • PROMESA Is Not A Bailout. “Of crucial importance, the financial control board is NOT a cash taxpayer bailout of Puerto Rico—which is what the Puerto Rico government wants as do many Democrats in Congress.” (Dr. Arthur B. Laffer & Stephen Moore, “HOW CONGRESS CAN SAVE PUERTO RICO FROM INSOLVENCY,” Laffer Associates, 5/4/16)
  • House GOP PROMESA Bill Effort Is “Economically Wise.” “To their credit, House Republicans are engaged in a good faith, and in many ways thankless, effort to resolve the crisis in a way that is timely, economically wise, and equitable to all the stakeholders directly affected by the debt crisis.” (Dr. Arthur B. Laffer & Stephen Moore, “HOW CONGRESS CAN SAVE PUERTO RICO FROM INSOLVENCY,” Laffer Associates, 5/4/16)

 

No Action Now Will Require A “More Costly And Intrusive Intervention” Later. “There is also a practical case for Washington to intervene now.  Purely as a financial matter, a fair and workable solution to the debt crisis that includes long term financial and economic structural reforms will obviate a much more costly and intrusive intervention in the coming years.” (Dr. Arthur B. Laffer & Stephen Moore, “HOW CONGRESS CAN SAVE PUERTO RICO FROM INSOLVENCY,” Laffer Associates, 5/4/16)

 

Puerto Rico Is “Nearing” A “Humanitarian Crisis” With Basic Services “In Jeopardy.” “The Obama Administration and some members of Congress are calling the Puerto Rico financial calamity a ‘humanitarian crisis,’ and it is nearing that point.  The financial chaos has reached an emergency level, and citizens of Puerto Rico may lose access to very basic public services, including schools, education, hospitals, and infrastructure like clean water.  Basic public health and safety are in jeopardy.” (Dr. Arthur B. Laffer & Stephen Moore, “HOW CONGRESS CAN SAVE PUERTO RICO FROM INSOLVENCY,” Laffer Associates, 5/4/16)

  • The Debt Crisis Has Worsened The Zika Virus. “On top of all the money woes, the island’s setbacks have been exacerbated in recent weeks by the spread of the mosquito- borne Zika virus that could infect as many as one in five Puerto Ricans. This will lead to a further exodus from the island and keep tourists away.  Things have gone from bad to worse.” (Dr. Arthur B. Laffer & Stephen Moore, “HOW CONGRESS CAN SAVE PUERTO RICO FROM INSOLVENCY,” Laffer Associates, 5/4/16)
  • “Nearly Half The Children In Puerto Rico Live Below The Poverty Line. The Poverty Rate Is Nearly Twice As High As In A High-Poverty State, Such As Mississippi.” (Dr. Arthur B. Laffer & Stephen Moore, “HOW CONGRESS CAN SAVE PUERTO RICO FROM INSOLVENCY,” Laffer Associates, 5/4/16)
  • Puerto Rico Has Been In A Mini-Depression For Nearly Two Decades. ”While the U.S. economy has risen by about 13% in real terms since the Great Recession ended in 2009, Puerto Rico’s economy has contracted by more than 5%. From a growth perspective, Puerto Rico has been in the grips of a mini-depression since the start of the 21st century 16 years ago—just like it was in the 1970s before Puerto Rico pursued pro-growth policies.” (Dr. Arthur B. Laffer & Stephen Moore, “HOW CONGRESS CAN SAVE PUERTO RICO FROM INSOLVENCY,” Laffer Associates, 5/4/16)

Speaker Ryan Argues “Persuasively” That U.S. Has An Obligation To Help Puerto Rico. “The federal government will not allow a U.S. Commonwealth territory to fail financially and slip into a spiral of economic decline.  House Speaker Paul Ryan argues persuasively that although the financial mismanagement, overspending, and a reckless pattern of borrowing by Puerto Rico’s home rule government are the root causes of the crisis, Washington has a legal and moral obligation to rescue the people of Puerto Rico, who are, after all, American citizens.” (Dr. Arthur B. Laffer & Stephen Moore, “HOW CONGRESS CAN SAVE PUERTO RICO FROM INSOLVENCY,” Laffer Associates, 5/4/16)