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July 13, 2019 - Freedomain Radio - Stefan Molyneux
43:43
The Fall of Puerto Rico. Prepare Yourself Accordingly.
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This is Stevan Molyneux from Free Domain Radio.
I'm here to tell you about Puerto Rico, which is the Achilles heel that may well bring down the empire.
Puerto Rico's debt obligations, currently estimated at $72 billion, is four times that of Detroit, which fled for Chapter 9 bankruptcy, as I'm sure you're aware, in 2012.
You can find out more information about that on The Truth About Detroit on this channel.
Now, Detroit, of course, was the largest city in the United States ever to file for bankruptcy, but as a commonwealth, Puerto Rico, including the state-run corporations and government agencies, does not have the option under the U.S.
Constitution.
It cannot file for bankruptcy and thus shield itself from any creditors.
If we compare this to the much-hyped showdown between the European Common Union and Greece, It is significant and serious for the United States.
Puerto Rico's government bonds are currently trading in the U.S.
municipal bond market, while the vast majority of Greek debt, of course, is in the hands of the International Monetary Fund, the European Central Bank, and various European countries.
Out of about $350 billion in Greek debt that remains outstanding, only about $14 billion is owed to U.S.
banks.
However, the vast majority of Puerto Rico's estimated $72 billion debt is in U.S.
holdings.
According to analyst Daniel Hansen, according to most recent estimates, about 60% of the island's bonds are owned by traditional municipal bond investors, and the rest is in the hands of hedge funds and other crossover investors.
Puerto Rican bonds were incredibly popular because of their high yields and the Commonwealth's triple tax exemption.
Interest payments are exempt from federal, state, and local income taxes in all 50 states.
And this, of course, is a considerable advantage to heavily taxed regions in America.
In a very low interest rate, World.
Puerto Rico's bonds have been offering yields of 8.7% compared to 10-year U.S.
Treasury notes, which are hovering around 2 and 3%.
And this is a huge and giant tax subsidy towards Puerto Rico.
Of course, if you are allowing for Puerto Rican bonds to be tax-free, it simply means you have to increase the burden on other forms of bonds and stocks and other income.
So again, it's just a massive subsidy towards Puerto Rico, which they have used to dig themselves further into debt.
If you compare this to the Greek situation, of course the Greek Government had the massive subsidy of aligning itself or putting itself in the same credit rating environment as a country like Germany, thus getting massive reductions in the interest it would have been charged.
And so whenever you subsidize, you create irresponsibility.
That is a basic fact of nature.
And so the Constitution of Puerto Rico contains a kind of an unusual clause.
General obligation bonds are paid ahead of virtually any other government expenses.
And the government has also, through the Constitution and through other financial mechanisms, created all these backstops, lockboxes, and guarantee mechanisms for these general obligations.
And they've actually farmed off or auctioned off specific revenue streams and promised them to certain groups of bondholders.
bond holding, very similar to the word bondage, in other words, human slavery.
I really want to be clear about what government bonds are.
The government does not produce any wealth.
It does not create wealth.
And so when the government offers to pay you $108 next year for $100 now, where does it get the extra $8?
Well it has to increase taxes, it has to borrow, or it has to print.
And all of these are direct or indirect forms of taxation.
So when the government is promising to give you more money back than other company that's going to invest it and gain a rate of return based on increased sales, basically how many guns to your head do you want pointed at you in a year or five years or twenty years or in the case of some Canadian provinces multi-decade bonds.
It's a way of getting money from the unborn.
It is a way of enslaving future generations through buying votes in the here and now.
And it's cowardly, it's vile, it's vicious.
If you want something from the government, at least step up and have the decency to pay for it yourself.
Ah, you see, but that doesn't work very well, does it?
Because if the government's going to offer you $500 in benefits and then immediately taxes you $1,000 to pay for all of the bureaucratic overhead it takes to give you the $500, then the illusion of getting something for nothing doesn't work very well.
However, if the government can float a bond, pay you $500 in the here and now, and stick generations down the road with a $1,500 or $2,000 bill, looks like something for nothing, doesn't it?
Since Puerto Rico bonds have featured this unique tax advantage, there of course is an artificially high demand for Puerto Rican debt.
And it's astounding how high it is relative to, as we mentioned, U.S.
Treasury notes.
Six or seven percent more.
Now the economic crisis in Puerto Rico The leader of Puerto Rico has just informed the world that they can't possibly pay off these obligations.
And it is going to be a pretty strong acid test for the U.S.
municipal bond market, which of course cities and states rely on to finance even the most basic government services.
Because you see, it doesn't work if you tax people for what they want.
Then the lie of something for nothing is revealed.
So this crisis is going to raise borrowing costs for city and state governments, as investors become more wary of lending to them.
Uncertain that they're going to receive full payment in the future.
See, if you have a rock solid, like a AAA credit rating, you can borrow at low rates.
If some of your assets, i.e.
Puerto Rican bonds, are revealed as shaky or uncertain, well, what happens?
People say, well, there's more of a risk now, and so we're going to have to raise what we are going to charge.
you in interest to lend to you.
And that is going to be a problem.
Of course, banks, which hold these bonds as assets, may have to write down some of the value of their assets, and that's going to cause them, to trigger them, to claw back their lending, to call in loans or to loan less in the future, because you're only allowed to have a certain ratio of lending because you're only allowed to have a certain ratio of lending out to And so if your asset value goes down, sometimes 10 to 1, 20 to 1, before the economic crisis of 08, some banks were leveraged or some financial institutions were leveraged at 30 to 1.
So if you lose a billion dollars worth of asset value because your Puerto Rican bonds have gone down in value, you might have to claw in 10 or 20 or 30 billion dollars worth of loans to reduce your exposure and that's the ripple effect that can be catastrophic.
Now, of course, as we mentioned, the island is unable to declare bankruptcy.
So a debt default would leave a massive Dickensian-style legal quagmire that would go on for years and years and years, if not decades.
And this is similar to what's going on in Europe.
Governor Alejandro Garcia Padilla said, my administration is doing everything not to default, but we have to make the economy grow.
If not, we will be in a death spiral.
Of course, it won't just be then.
So let's have a look at this.
Debt.
These are all normalized for inflation.
Gross debt.
Puerto Rico in billions.
The red is public debt and consumer debt.
So public debt from 2005, 36.7 billion, has now risen to 72 billion.
Well, it's not quite triple, but they're trying.
And consumer debt has remained relatively static.
And this is a lot of financial Wizardry up the butt kind of stuff is going on here where they're creating all these massively complex financial instruments in order to create the illusion of solvency.
Moody's in 2012 decided to try and figure out what was actually going with all of this cross-pollination of financial hellscapes and they found that they were actually 10 billion dollars worth of bonds outstanding than it had counted before.
And it also reported that the island had issued 1.1 billion dollars of bonds in 2011, of which 850 million brought no lasting public works, but just serviced existing debt and plugged budget holes.
So that's where the island is sitting at the moment.
So, for one example, in 2006, Puerto Rico government created an independent debt issuing authority called Cofina, which had first claimed to a fixed portion of all of the sales taxes on the island.
to offer as collateral for the bonds that it was producing.
And it issued about $15 billion worth of bonds, then ran out of capacity, and Puerto Rico still had to borrow.
So this shell game, this con game, this Nigerian banker takes all of your Bitcoin stuff, is really the way that it pretends to work.
Extend and pretend.
Extend and pretend.
This is gross public debt in billions by type.
So public enterprises, three large public enterprises in Puerto Rico, water and sewage utility, state electricity company, and the highway authority.
You know, you need a lot of highways on an island.
They've been responsible for most of the increase in public debt, as you can see, risen from about $25 billion in 2005 to almost $50 billion in 2014, whereas the central government has only gone from $8 or $9 to $14.3.
So these public enterprises are just another form of crony capitalism, socialism, and it's all completely mad.
As the head of the government has pointed out, If current trends continue, every single man, woman and child in Puerto Rico will owe $40,000 by 2025.
I don't think there are enough couches in the country to find enough change under to pay any of that.
So what has gone on in inflation-adjusted per capita gross domestic product?
So if we take 1990 as a baseline, we can see here in red, this is the growth.
It peaked around 2005-2006 then it began to decline significantly compared to Latin America and the Caribbean and to the United States which have some potential indications of at least according to government issued numbers Inflation, it's just another government program with as much truth as all the other government programs.
They're starting to look back up, but Puerto Rico... And it's interesting that this happened before the financial crash that we'll get into in a few minutes.
So let's compare bad with worse.
Debt to GDP percentage.
The five worst states.
So the US average of debt to GDP percentage is 12.5% for the states.
New York, 24.2.
Kentucky, 22.5.
Nevada, 21.9.
Rhode Island, 21.7.
South Carolina, 21.2.
Puerto Rico, coming in as the World Heavyweight Champion Title of Debt-to-GDP Percentage at 69.2.
That's a KO and it's about to bite the ear off your economic future.
Net tax supported debt.
So this is debt that can be paid for through taxes.
Median for all.
U.S.
states is just over $1,000 per capita.
Connecticut, $5,400 and change.
Massachusetts, just under $5,000.
Hawaii, $4,800 and change.
New Jersey, $41,000.
New York, $3,000.
Puerto Rico, $15,000.
Hawaii, $4,800 and change.
New Jersey, $41,000.
New York, $3,000.
Puerto Rico, $15,637 net tax supported debt.
As a percentage of personal income, the median for U.S. states, $2.
Hawaii 10.6, Connecticut 9.2, Massachusetts 9, New Jersey 7.3, Washington 6.4, Puerto Rico 87.5 percent.
Thanks Spain!
So glad we won that war at the end of the 19th century.
Jersey, 7.3%.
Washington, 6.4%.
Puerto Rico, 87.5%.
Thanks, Spain.
So glad we won that war at the end of the 19th century.
So what happened?
Well, Puerto Rico first came into the orbit of the United States after the end of the Spanish-American War, signing of the Treaty of Paris in 1898.
Puerto Ricans have been citizens of the U.S.
since 1917, but cannot vote in national elections.
They are represented in Congress by a resident commissioner who has a voice in the House of Representatives, but no vote, and therefore no ears to listen to him.
Most federal taxes, except those such as Social Security taxes, are not levied in Puerto Rico.
No federal income tax is collected from Puerto Rico residents on income earned in Puerto Rico, except for federal employees who are subject to specific taxes on their salaries.
Until 2006.
Remember, we saw that dip in the graph.
Until 2006, Puerto Rico also had federal tax credit advantages for corporations and manufacturing companies compared to the mainland United States and foreign countries.
So these tax credit advantages were designed to help Puerto Rico be competitive with developing countries.
U.S.
labor rights and safety standards, environmental standards, OSHA standards, and so on, all need to be compliant in Puerto Rican companies.
A lot of other countries don't have those requirements, so they had to give all of these tax credits.
And so a huge amount of manufacturing and other kinds of industry floated out to Puerto Rico, and that was a problem.
Of course, why would American government want to offshore manufacturing jobs to Puerto Rico?
Puerto Rico doesn't lend it money.
Much better, you see, to get the manufacturing jobs shipped off to China so that the Chinese economy can grow, so that the Chinese can buy US bonds.
Because screw working class blue-collar people.
Too bad!
We need the cash.
Daddy and Uncle Sam need a fix.
So we're shipping your jobs off to China.
Here's some welfare.
Netflix.
Video games.
Soma.
So between 87 and 97, Puerto Rico's import and export business nearly doubled, because people respond to incentives.
And when you get lower taxes, you get more growth.
Except in the mind of liberals, because the laugh record makes their explodey brains go boom.
In 1996, enough freedom!
These tax credits were placed on a 10-year phase-out schedule.
This decision created a mass exodus of businesses from the island, which led to the loss of over 80,000 jobs.
Hey, you're real pretty!
I'm gonna date you, because I'm shallow.
Oh, did you gain 50 pounds?
Bye-bye.
After the tax credits were eliminated in 2006, Well, you see, you can't really cut your spending that much.
You can't make it rational because the whole illusion of democracy is to give you something for nothing by basically selling the future economic kidneys of the unborn on the black market of now.
So they had to adopt a 5.5% sales tax to offset the loss of revenue.
You know, like if my donations are down in any particular month, because it's a donation-supported show, freedomainradio.com slash donate to help us out.
If my donations are down, I can either curtail my spending, curtail my spending?
You've got to be kidding me!
No!
It's time to go rob some old ladies.
Well, in this case, stealing energy from the incubator tanks in the ICU unit for fragile newborns.
Investment banks worked with government officials to create new bonds backed by a portion of this new sales tax.
See, how to turn an asset into a liability has UBS Citigroup and Goldman Sachs, our favorite honest accounting firm, were all involved and gained over $900 million in fees to assist with Puerto Rico's $126.6 billion worth of bond sales since 2000.
$276.6 billion worth of bond sales since 2000.
They're just here to help you.
Instead of cutting further spending in light of an economic downturn, funds from the bond sale were used to delay cuts to the public workforce, which was over a quarter of those employed on the islands.
See, when you have really nice weather and you basically can drop a banana peel in the ground and have 14 bananas the next day, really important to have a massive government.
I don't know why.
What's going on educationally?
You see, when you have massive subsidies, a huge government workforce, and massive welfare schemes, which we'll get to in a moment, is it really worth getting educated?
Even though higher education in Puerto Rico is basically free.
Bachelor's degree or more, 24% of the population.
Some college associates, 22% of the population.
High school, Or equivalent, which is about the equivalent of probably grade 4 or grade 5 a couple hundred years ago.
People say, ah, you see, but Shakespeare went to government school.
Yes, he did, but only for six weeks a year.
Otherwise, he would have been writing jingles for SSRI ads.
High school or equivalent, 27%.
Less than high school, 27%.
Not the wisest and most educated population on which to build a future economy.
Approximately 146,000 or 17% of Puerto Rico's children are in families where the head of households lacks even a high school diploma.
Can't help you with your homework, you're in grade 5.
Students who attend the University of Puerto Rico receive a massive subsidy only paying a flat rate which is far lower than on the mainland and far lower than what well-off University of Puerto Rico students paid for private high school previously.
It's free.
Still can't get more than a quarter of the population to take it.
Median household income in Puerto Rico, 1980, just under $11,000.
Hit a peak of $20,000 and changed in 2006.
Dipped slightly since then.
And this is important to understand.
This sort of red bar to the right extends way down into the ground.
This is like a diamond mine to the center of the earth filled with debt.
This is not what you see.
This is $19,200.
That's the income, but given the amount of debt, it's a line that goes way down into the minuses.
Official unemployment rate.
Okay, we'll hold our nose and take these numbers at face value.
Puerto Rico, 20% went down to about 10% when they had tax credits and people could actually get a job without being, let's just say, not too wined and dined by the federal government before the tax making activity occurred.
See, no means no on college campuses, but not when it comes to your wallet.
And, of course, the unemployment rate has gone up and dipped a little bit since then.
But much higher, of course, than the United States.
So, of course, you want to lend money to these people.
In Puerto Rico, only 40.1% of the adult population is employed or looking for work.
Only 40.1%!
Breaking no stereotypes!
Where the weather is good, the living is easy.
63% of the mainland United States of the adult population are employed or looking for work.
So the rest are economically dormant or they're working in the grey economy, not the 50 shades, but the one that's not so much on the legal radar.
Here's a quote.
Employers are disinclined to hire workers because A. The U.S.
federal minimum wage is very high relative to the local average.
Full-time employment at the minimum wage is equivalent to 77% of per capita income versus only 28% on the mainland.
So you see that minimum wage is three times higher in Puerto Rico relative to the per capita income.
And a more binding constraint, unemployment.
28% of hourly workers in Puerto Rico earned $8.50 or less versus only 3% on the mainland.
And B, local regulations pertaining to overtime, paid vacation, and dismissal are costly and more onerous than on the U.S.
mainland.
So you do have to overpay them.
On the other hand, they're almost impossible to fire.
I can't imagine why there's not more unemployment.
Workers are disinclined to take up jobs because the welfare system provides generous benefits that often exceed what minimum wage employment yields.
One estimate shows that a household of three eligible for food stamps, AFDC, Medicaid and utility subsidies, could receive $1,734 per month as compared to a minimum wage earner's take-home earnings of $1,159. per month as compared to a minimum wage earner's take-home So even though the minimum wage is rapidly high relative to the median income, you can still get $600 or so more by going on Welfare.
Oh, Charles Murray, where are you?
We need you.
Labor force participation rate since 2006, 48.9, has gone down to 40.1%.
48.9% has gone down to 40.1%.
So this is the effects of debt, of giving people something for nothing.
If you give people something for nothing, they're not hugely likely to want to work very hard for something less than nothing, which is less money but more work.
There has been a slight flaw back in the Private versus government employment.
The numbers for government employees going down is always, to me, a little bit of a shell game.
Because when you lay off a government employee, maybe it's early pension, which is what happened in Greece.
They say, oh, we cut government workers.
You think you're saving money?
You're really not.
Because all you do is shift them onto a woefully underfunded pension scheme, which we'll get to in a minute or two.
Or, let's say they can't find a job because you've just cranked up the taxes so enormously, and so instead of you paying them to interfere with people who want to work for a living, i.e.
their government workers, instead they're going on welfare.
So have you really saved any money?
No, not really.
So government work is down slightly, government expenses not so much, and private employment is also down.
So, the majority of Puerto Rico's electricity is produced by burning imported oil.
Oh, Mother Nature, bend over, grab your shoelaces, and take it like a man.
It's brutal.
Although the price of oil has fallen, of course, the electricity costs are still incredibly high, second only to Hawaii.
Others in the Caribbean have turned to natural gas and renewable energy.
The electricity company of the government continues to use inefficient technology.
This elevated cost cascades down to goods and services, stunting potential growth sectors like tourism.
Oil is expensive to produce electricity.
I don't know why they don't turn to all of this incredibly efficient solar energy.
I believe they get a day or two of sunlight a year, but it's just brutal.
But this is what happens when you subsidize.
You freeze in time.
Whenever you circle any entity or organization, or individual for that matter, With the power of the state, whenever you shield them from consequences and remove risk from the equation of their existence, you freeze them in time.
It's like one of those ancient cavemen you see in glaciers with the grimace of whatever took their leg off still on their face.
You freeze them.
Now look at government schools.
I mean, look at how much has changed in terms of education.
You'd like to think I'm handing out a little bit of education here too.
But in governments, you know, 150 years ago when that was the technology, it was a bunch of kids in a schoolroom.
And a teacher with a whiteboard.
A blackboard.
Now, of course, a bunch of kids in a room and a teacher with a whiteboard or a blackboard.
But it doesn't really change.
That's what happens.
Of Puerto Rico's $72 billion in bonds, about $25 billion were issued by public corporations.
These public corporations provide critical services on the island, including electricity, building roads, running water, and sewer-related responsibilities.
Although, The sewers occasionally do what I do with too heavy a Mexican or Indian meal and back up a little bit.
Although my burps are mostly contained within my region, the backup of the sewage system in Puerto Rico tends to leave shit on the ceiling, otherwise known as the previous rates of their bonds.
So this is fascinating, too.
I mean, you have an island, so you kind of got a monopoly already.
You're given a monopoly by the government It's a captive audience, no one can compete with you, and you still have to issue bonds to make things work.
The electrical utility, a prepper, is already operating on a pure cash basis.
It's cash only, baby!
You gotta get cash to them in order to get anything.
Its debt accrues interest over $6 million per year.
The water and sewage company, Prasa, is not even projected to generate enough revenue to cover Environmental Protection Agency's mandated investments.
So there's that.
Over and above the bond debt, Puerto Rico owes $37 billion or more in pension obligations to current and former workers.
Puerto Rico's three major pension plans are approximately only 0.7% funded.
So that's not great.
A properly funded pension scheme has a hundred cents on the dollar in terms of funding, but that's not really the case with Puerto Rico.
It is just absolutely brutal.
And right now, Well, they have seven-tenths of a penny for every dollar that retirees are due because they took in the money for the pension scheme with Social Security.
They took in the money for the pension scheme and what happened?
Well, they spent the money and they just placed IOUs into the bank vault, the lockbox, right?
So there's no money for these retirement schemes.
It's all been blown on buying votes in the here and now because you see, without the government, how would you save for your retirement without cannibalizing the young?
Local labor laws also further magnify employment costs.
Anything over an 8-hour workday is considered overtime, as opposed to a more than 40-hour workweek.
Like the mainland United States, public sector workers get approximately 30 paid vacation days each year, just like podcasters.
You know, because it's sunny out.
So, who wants to be inside, pretending to push paper from one end of your desk to another?
There's a mandatory year-end bonus.
See, it's not a bonus if it's mandatory!
Which must be funded and proven just cause when trying to lay off or fire an employee is next to impossible.
Hey!
Are you a manager?
Would you like to spend the next three years in union hearings and turn over all of your emails and have lots of questions and get lawyers and all that?
Or do you just want to put up with an inefficient worker?
You be the judge!
There's a little bit of Soviet Union everywhere.
This is the average retail price of electricity cents per kilowatt hour.
Puerto Rico, $25.05.
Average for the U.S.
states is little under $10.
Hawaii, $34.
Alaska, $16.3.
Connecticut, $15.5.
New York, $15.2.
Vermont, $14.2.
So it's a little pricey and this is how all of these crazy subsidies and everything So you subsidize the government like crazy.
The government doesn't want to issue all the bonds itself.
So it has the socialist arm of the government known as the electrical company or the highway company.
But if you issue bonds on its behalf, this drives up the price of everything that they do.
And so you need more subsidies because nobody wants to come and visit a place where every time you shave it costs you $19 worth of electricity.
So, these elevated costs, they cascade down to all the goods and services.
They stunt potential growth sectors, such as tourism and so on, and it's just ridiculous how bad and bloated and horrifying it becomes.
Here's the Consumer Price Index.
If we take 2006 for Puerto Rico, 98% has gone to 117% in eight years.
USA.
has gone from 202 to 237% on the same scale.
The poverty rate is brutal.
We keep thinking that if we give money to poor people, it makes them not poor.
And this, of course, is shallow, surface, retarded thinking, in other words, leftism, because when you give money to poor people, you are paying for the production of poor people.
It's really not that hard.
It's like saying, well, if I buy a lot of Mercedes, I'm going to end up with fewer Mercedes.
No, if you buy Mercedes, you're stimulating the production of Mercedes, you're going to end up with more Mercedes.
So when you give money to poor people, you stimulate the production of poor people, and also you make a huge legal, sorry, you create a huge financial barrier for them to actually start working, because when they start working, If they're taking welfare, they're taxed at a 100% rate.
That doesn't work out very well.
You know who else was taxed at a 100% rate?
Slaves!
So it's really not that dissimilar.
The U.S.
Department of Health and Human Services and the U.S.
Census Bureau both record poverty statistics for the U.S., but they have their own calculations for the federal poverty level.
The poverty level as defined by HHS in 2015 was 20,090 a year for a family of three, 24,250 for a family of four.
The poverty level as defined by the Census Bureau, because there's nothing better than duplication, especially when it's contradictory duplication, to bring clarity to any situation. 18 18,552 a year for a family of three, 23,834 for a family of four.
Poverty guidelines are not defined for Puerto Rico, but the U.S.
Census Community Report indicates that 41.4% Puerto Ricans live below that poverty level compared to the U.S.
average of 12.6%.
So it's great that they have all that money.
It would be even better if they weren't so poor.
If you look at the poverty rate, U.S.
average 12.6, Puerto Rico 41.4, beating out Mississippi by, I guess, more than double at 20.1%.
You can look at these other numbers if you want.
If you're just listening to the audio, this might be one of those ones you want to do video for.
Percent below poverty level, under 18, 56.9 percent, 18 to 64, 41.9 percent, 65 plus, 39.7 percent.
In another shocking statistic, 56 percent of Puerto Rico's children live in poverty, compared with 22 percent for the entire United States.
But because you've bought the votes already, what do you care about the kids?
They can't vote!
A research study released by the Annie E. Casey Foundation says that an estimated 748,000 or 83% of Puerto Rico's children live in high poverty areas.
or 83% of Puerto Rico's children live in high poverty areas.
They also reported that 460,000 or 57% of Puerto Rico's child population grow up in a single parent family because that's just great as far as children's outcomes go.
Nothing better than single parent families for social stability, peace, tranquility, late night no noise, and higher educational standards.
So even if you're not considered to be living in poverty, it still has a massive impact on your development.
Quote, When a large majority of our children live in high-poverty areas in single-parent families and with parents who lack secure employment, we cannot ignore the threats of their well-being, said activist Rivera Hernandez.
If we focus on helping families, then our children will do better.
We must target our limited resources to strengthen our children's prospects and help prepare them for the future.
But you see, When you have the government, you don't have such a thing as a target.
There's no cost, there's no benefits, there's no success metric, there's no failure metric.
If you can't win and can't lose, don't know where the game is, have never heard of the rules, and there's nobody else in the race, where are you going to target your energies?
Madness.
Mental status, Puerto Rico, adults 18+, 35%.
Singles, prigtao?
40% married and 25% divorced, separated or widowed.
So, of course, there's been a significant loss of job opportunities since the massive tax hikes in the mid-2000s, starting in the mid-1990s and going until 2005-2006.
And so there's brain drain, massive flight of those who have the most opportunities and resources away.
from the island.
After growing for most of the last two centuries, Puerto Rico's population decline for the first time in 2006 has continued to decline to about 3.5 million by 2015.
So the loss of 1% of the population each year is 10 times more than the rate in Japan or West Virginia, the only U.S.
state with Sub-Zero.
Growth.
And this is the people, the smartest people, the people with the most opportunities, they're the ones leaving.
And so you have basically a tax base composed of retired dunderheads who are not going to be producing a lot of value to tax to pay themselves.
Population change since 1990.
If we look at Latin America and the Caribbean, well, breeding like rabbits.
The United States, a little bit less.
And in Puerto Rico, well, it's, I guess, follows the top of my head with slightly less fuzz.
It has really gone down after peaking in the early 2000s.
So why do island-born Puerto Ricans move to the U.S.
mainland?
Household and family, 38% job-related.
42% housing 7% I've retired 7% because you know if you want to retire Puerto Rico to Alaska man buck the Trent be the salmon swimming downstream and other is 6% so The house of cards it's a shell game Government-run monopolies in charge of essentials is a terrible idea.
It's astounding to me how this vampire of socialism, of fascism, of mercantilism, of statism, of government-run monopolies, this vampire, it doesn't matter how many rational Empirical moral stakes are driven into its heart.
It always comes back.
It's just madness.
But of course governments like to control monopolies because they can then hand out patronage jobs and heads of the monopoly plum gigs to whoever can raise the most money for them and they can pretend to lower prices.
And of course all they're doing is becoming progressively more inefficient but subsidizing the lowering of the prices or the maintenance of the prices through debt.
So it's just this massive shell game The bill always comes due.
So when you pay people not to work, when you give them over $1,700 in benefits for not working, you create this culture of laziness, of inactivity, which combined with the heat... There's actually an interesting statistic which says that school scores in America rise with a correlation of more than 0.5.
I think it's about 0.55.
Average school scores rise the closer you get to the Canadian border because hard-working people Don't mind the cold, and the outburst is somewhat true.
So it creates a culture of laziness and it destroys the work ethic.
You get one generation out of the work ethic, out of how to deal with conflicts with your managers, how to deal with customers, you get rid of one generation of that and the entire accumulated wisdom of tens or hundreds of thousands of years vanishes with them.
It's like the last person dying who only speaks a particular oral language, never been written down, that language is gone.
And it's very hard to recover from that.
So, of course, employers don't want to hire workers.
Very, very high minimum wage.
Very hard to fire people.
And it creates a grey market, a black market economy, which generally leads to more crime.
Since when you make people hard to hire, you are funding the war on drugs because more people will turn to drug running rather than getting jobs which aren't there.
And again, that leads to more crime.
You get a massive brain drain as economic conditions get tougher.
Only the most passive and inert tend to stay, those on the lower IQ space on the bell curve, and this is all very hard to recover from.
And if you say to these people, how would you like freedom?
They're like, nope, we like the steady drip, drip, drip of the giant tax teat utter known as the mainland population continuing to give us benefits.
And bonds, again, bonds and bondage, they are economic shackles that enslave people.
It's greed that tends to destroy, greed for the unearned that tends to destroy civilizations.
And this is what happens.
This is the socialism that is rapidly expanding and rapidly spreading and is going to be part of everyone's future.
This is a form of human slavery.
I really, really want you to understand this.
When you are buying a bond, you are buying human income.
You are buying human lives.
You are buying time slices of human existence, particularly in Puerto Rico where you have a direct pipeline to the wallets of the population.
You are buying human beings.
You are buying them like livestock.
They are tax cattle and you are buying them.
Bonds are an unholy way to pretend to the general population that they can get Something for nothing.
It is also a litmus test of the love that a society has for its children.
Government debt and government bonds and unfunded liabilities, which in the US run over a hundred trillion dollars these days, that is the litmus test of the degree to which a society loves its own children.
They say we borrow the environment from the next generation and we should not pollute it, but we also borrow the economy, we borrow capital reserves.
We borrow money from the next generation.
We borrow structure.
We borrow the rule of law.
We borrow economic productivity, property rights, and stability from the next generation.
And the degree to which we love our children is the degree to which We push back and refuse to buy the lies of people who offer to give us something for nothing.
The liars, the sophists, the cheats, the charismatic shell game artists who are offering to serve us up our children's futures for the sake of a couple of dollars in the here and now.
These are the people that a society that loves its children resists.
Now, on the plus side, we love our children enough that we're not willing or dying, most of us, to send them to war anymore, but we're still willing to sell them on the open court of the highest bidder, of some sleazy-ass politician who's going to offer us something for nothing.
There is no something for nothing.
There is only something at the expense of someone else.
In the free market, there's win-win.
In the government, there is only win-lose.
And it is tragic to see what people will sell their freedom for.
Freedom is a massive, unbelievable, gold-dusted gift.
It is a throne built on the blood of thousands of years of struggle.
Human liberty to push back, to separate the church and the state, to separate the church and the economy, to end the aristocratic class.
To bring about a free market, to limit government, to control tyranny.
This has been the work of tens of thousands of years and untold millions and hundreds of millions of deaths.
That is how this great golden gift of liberty has been given to us.
It is an unbelievable gift.
It is the greatest gift in the history of the species.
And it is the gift that the most people have died for to give to us.
It is an incredible treasure that we alone, this generation and a few generations past, over the entire course of human history, the 5,000 years of recorded history, the 200,000 years of Homo sapien, we have been given this tiny slice of unbelievable liberty.
Unbelievable liberty.
This is an unbelievably, I'd like to say God-given gift, but it is human beings that have bled and crawled and died and held their own intestines and lost their limbs in order to give us this gift of human freedom.
and And what are we willing to sell it for?
A couple of hundred bucks a month?
Thanks, hundreds of millions of people who died to set us free.
That's nice.
I mean, good.
Well, you know, we'll put a couple of cenotaphs up.
In the town square.
How's that?
You know?
We'll play a bugle.
I'll wear a little fucking plastic poppy.
Thanks so much, dead people.
Great gift.
But, to be honest, there's this sleazy guy over here.
He's got a really nice haircut.
Got a great bunch of PR handlers.
Her own private email server.
These people I'm trying to weigh this in the balance.
You died by the hundreds of millions to give me this great golden gift of liberty, which is fragile, easily broken, apparently sold to the highest bidder at not a very high price.
You died by the hundreds of millions to give me this gift of liberty.
These people over here got a couple of hundred bucks in their pocket.
I don't know, a couple of hundred bucks.
That's pretty good.
And if there was an afterlife, all the dead who died to give us freedom.
We'll wake the fuck up and strangle us in our sleep.
There will be no economic recovery, my friends.
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