Puerto Rico is on the verge of a debt-driven collapse in many of its basic governmental structures. This problem is made worse by the fact that Puerto Rican municipalities, unlike mainland cities and counties, have no ability to restructure using federal bankruptcy law.
But Puerto Rico’s problems go even deeper. If these issues are to be avoided in the future, the island must transform from a black hole of capital to a magnet for capital.
Some think the solution lies in tax increases. That would be like giving poison to a dying man.
The best way to fix what ails San Juan is to turn the entire island of Puerto Rico into an enterprise zone.
Initially conceived by the late, great Jack Kemp, enterprise zones are pockets of pro-growth nirvana (especially on tax policy) strategically placed inside economic disaster areas.