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CPR for a Flatlining Economy

Recently released economic data for Puerto Rico present a significantly deteriorating economic picture.  The Puerto Rico Labor Department reported that the unemployment rate for the month of July was 16.5%, the highest level in 16 years.  If we take into account the unemployed who are not looking for jobs, the so-called discouraged workers, and those who are underemployed, who desire to work full time but can only find part-time work, the island’s unemployment rate would probably approximate 25%.

Deuda

Durante el año fiscal 2009 la deuda pública total de Puerto Rico igualó por primera vez en tiempos recientes el Producto Nacional Bruto (PNB) de la isla. Los economistas consideran este indicador como de gran importancia porque si la proporción entre deuda y el PNB crece a una tasa rápida, las instituciones financieras que le prestan dinero al Gobierno podrían cuestionar la solvencia financiera de éste y demandar intereses más altos cuando le compran deuda.

Tocando Fondo

La Junta de Planificación anunció el viernes pasado que la reducción en el Produto Nacional Bruto para el Año Fiscal 2009 fue de 5.5%.  Esa contracción evidentemente fue más profunda de lo que se esperaba.  En nuestra opinión esto pone en duda la posibilidad de una recuperación rápida en Puerto Rico. 

The Risk of Permanent Stagnation

Recently there has been a lot of talk among U.S. economists about “green shoots” and “seeing the light at the end of the tunnel,” popular ways of saying that the worst of the current recession is over and growth will probably resume late this year or early 2010. In Puerto Rico, however, economic indicators continue to hover in negative territory.

The Wages of Debt

Here’s an excerpt from our latest report, written by Sergio Marxuach, on the worrying trends regarding Puerto Rico’s public debt. The full report is available here. We have also posted a brief interview, in Spanish, that explains the nuts and bolts of the report.

Doing Away with Another Barbarous Relic

In 1923 John Maynard Keynes published his Tract on Monetary Reform, which was his first attempt to analyze the monetary instability that plagued the post-World War I world. In classic contrarian fashion, one of Keynes’ conclusions was that central bankers – by shackling tehemselves to the “barbarous relic” of the gold standard – were actually exacerbating monetary problems.

Gastos Escondidos

La crisis fiscal por la cual atravesamos ha provocado que nuestro gobierno tome una serie de medidas en busca de lograr estabilizar la situación. Por un lado ha aumentado varios renglones impositivos como el impuesto sobre la propiedad y una sobretasa especial para ciertos contribuyentes.

A new Challenge on Climate Change

On June 29, the U.S. House of Representatives approved the American Clean Energy and Security Act by the narrow margin of 219 to 212. This comprehensive bill, which now moves on to the Senate, seeks to create clean energy jobs, achieve energy independence, and reduce global warming pollution.