As the United States ascended to hyper-power status during the late 1970s, it changed colonial policy in Puerto Rico. The change, which included the elimination of favorable tax legislation and demilitarization, devastated Puerto Rico’s economy. Puerto Rico borrowed heavily in a failed effort to offset the dramatic decline in capital inflows. The federal government enacted PROMESA after Puerto Rico announced it could not repay the debt. The law was designed to restore Puerto Rico to financial solvency by imposing oppressive austerity measures. PROMESA was a watershed event because it stripped Puerto Rico of the limited sovereignty the federal government had allowed. But, just as colonialism is the source of Puerto Rico’s economic and humanitarian crises, colonialism will also sabotage PROMESA’s plan to extract wealth from an impoverished population. Hurricane Maria has guaranteed that Puerto Rico will never have the resources to repay the debt holders.
This is a preview of subscription content, log in to check access.
Buy single article
Instant access to the full article PDF.
Price includes VAT for USA
Subscribe to journal
Immediate online access to all issues from 2019. Subscription will auto renew annually.
This is the net price. Taxes to be calculated in checkout.
More recently Sebastian Gorka, former deputy assistant to President Donald Trump, stated in a Fox News interview, “We are not just a superpower. We were a superpower. We are now a hyper-power.” Washington Free Beacon. http://freebeacon.com/politics/gorka-pegs-united-states-hyper-power/.
Avi-Yonah, R. S. 2012. Transfer Pricing Disputes in the United States. In Resolving Transfer Pricing Disputes: A Global Analysis, ed. E. Baistrocchi, and I. Roxan, 24–94. New York: Cambridge University Press.
Ayala, C. J., and J. L. Bolívar. 2011. Battleship Vieques: Puerto Rico from World War II to the Korean War. Princeton: Markus Wiener.
Balmaceda, J. 2017. Puerto Rico Oversight Board Appears Doomed to Recycle Failed Austerity Schemes. Forbes, 22 March.
Barreto, A. A. 2002. Vieques, the Navy and Puerto Rican Politics. Gainesville: University Press of Florida.
Bram, J., F. E. Martínez, and C. Steindel. 2008. Trends and Developments in the Economy of Puerto Rico. Current Issues in Economics and Finance 14 (2). https://www.newyorkfed.org/research/current_issues.
Brands, H. 2016. Making the Unipolar Moment. Ithaca: Cornell University Press.
Briggs, A. 2017. Puerto Rico’s Ongoing Economic Crisis. American Enterprise Institute, 3 May. https://www.youtube.com/watch?v=BInQykj5R9Q&t=158s.
Brumbaugh, D. L. 2000. The Puerto Rican Economic Activity Tax Credit: Current Proposals and Scheduled Phaseout. Congressional Research Service. https://www.everycrsreport.com/reports/RS20695.html.
Cabán, P. 2015. Puerto Rico’s Long Fall from “Shining Star” to the “Greece” of the Caribbean. The Conversation, 12 June. https://theconversation.com/puerto-ricos-long-fall-from-shining-star-to-the-greece-of-the-caribbean-43097.
Cabán, P. 2017a. Puerto Rico and PROMESA: Reaffirming Colonialism. New Politics 16 (82): 120–125.
Cabán, P. 2017b. Maria Will Fundamentally Change US Policy toward Puerto Rico. The Conversation, 5 November. https://theconversation.com/maria-will-fundamentally-change-us-policy-toward-puerto-rico-86038.
Calero, H. 2015. Similitudes entre el inform Kruger y Tobin. El Nuevo Dia, 30 June.
Caribbean Business. 2017. Study Reveals Poverty Scenario in Puerto Rico after Hurricane María. 26 November.
Castillo-Freeman, A., and R. B. Freeman. 1992. When the Minimum Wage Really Bites: The Effect of the U.S.-Level Minimum on Puerto Rico. In Immigration and the Workforce: Economic Consequences for the United States and Source Areas, edited by George J. Borjas and Richard B. Freeman. National Bureau of Economic Research Project Report, ed. G. J. Borjas and R. B. Freeman. Chicago: University of Chicago Press.
Cimadevilla, F. J. 2003. The Imminent Shutdown of Naval Station Roosevelt Roads Will Wreak Economic Havoc throughout Eastern Puerto Rico. Caribbean Business, 17 July.
Citizens for Tax Justice Staff. 2016. Puerto Rico and Section 936: A Taxing Lesson from History. Tax Justice Blog, 9 August. http://www.taxjusticeblog.org/archive/2016/08/puerto_rico_and_section_936_a.php -.WYB_CNPyvOY.
Cohen, M. 2013. States Lost $40 Billion in Tax Revenue from Offshore Profit Shifting. Accounting Today, 6 February. https://www.accountingtoday.com/news/states-lost-40-billion-in-tax-revenue-from-offshore-profit-shifting.
Collins, S. M., B. P. Bosworth, and M. A. Soto-Class (eds.). 2006. The Economy of Puerto Rico. San Juan: Center for the New Economy.
Congressional Budget Office. 2016. Cost Estimate for H.R. 5278 Puerto Rico Oversight, Management, and Economic Stability Act. https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/costestimate/hr5278.pdf.
Congressional Task Force on Economic Growth in Puerto Rico. 2016. Report to the United States House and Senate. https://www.finance.senate.gov/imo/media/doc/Bipartisan%20Congressional%20Task%20Force%20on%20Economic%20Growth%20in%20Puerto%20Rico%20Releases%20Final%20Report.pdf.
Dietz, J. 2003. Puerto Rico: Negotiating Development and Change. Boulder: Lynne Rienner.
Financial Oversight and Management Board for Puerto Rico. 2017. Annual Report. https://juntasupervision.pr.gov/wp-content/uploads/wpfd/50/597eb4ede89ad.pdf.
Humberto, G. M. 1991. US Military Installations in Puerto Rico: An Essay on Their Role and Purpose. Caribbean Studies 24: 79–97.
Government Accounting Office. 1992. Food Assistance: Nutritional Conditions and Program Alternatives in Puerto Rico. July. https://www.gao.gov/assets/160/151923.pdf.
Greenberg, S., and G. Ekins. 2015. Tax Policy Helped Create Puerto Rico’s Fiscal Crisis. In Tax Foundation. https://taxfoundation.org/tax-policy-helped-create-puerto-rico-s-fiscal-crisis/.
Harvard Law Review. 2017. The International Place of Puerto Rico. Harvard Law Review 130 (6):1656–1679. https://harvardlawreview.org/2017/04/the-international-place-of-puerto-rico/.
Hexner, T., and G. Jenkins. 1995. Puerto Rico and Section 936: A Costly Dependence. Tax Notes International 10 (235): 119.
Krauthammer, C. 1990. The Unipolar Moment. Foreign Affairs: America and World 70 (1): 23–33.
Krueger, A. O. 2017. Puerto Rico’s Ongoing Economic Crisis. American Enterprise Institute, 3 May. https://www.youtube.com/watch?v=BInQykj5R9Q&t=158s.
Krueger, A. O., R. Teja, and A. Wolfe. 2015. Report Puerto Rico: A Way Forward. In Group for the Fiscal and Economic Recovery of Puerto Rico, ed. The Working. Puerto Rico: Government Development Bank.
Lachman, D. 2016. PROMESA Bill Offers Good First Step for Puerto Rico’s Recovery. American Enterprise Institute, 4 June. http://www.aei.org/publication/promesa-bill-offers-good-first-step-for-puerto-ricos-recovery/.
Lachman, D. 2017. Greek Lessons for Puerto Rico In Report: A Discussion on the Future of Puerto Rico’s Economy, by Nydia Velasquez. https://velazquez.house.gov/sites/velazquez.house.gov/files/FINAL%20-%20A%20Discussion%20on%20Puerto%20Rico%27s%20Future%20Event.pdf.
Lewis, G. K. 1963. Puerto Rico: Freedom and Power in the Caribbean. New York: Monthly Review.
Lockwood, D. 2000. The Destruction of the Soviet Union: A Study in Globalization. London: MacMillan Press.
Martínez-Otero, H., and I. J. Seda-Irizarry. 2015. The Origins of the Puerto Rican Debt Crisis. Jacobin, 10 August.
Mason, D. 2009. The End of the American Century. New York: Rowman and Littlefield.
McCaffrey, K. T. 2002. Military Power and Popular Protest: The US Navy in Vieques Puerto Rico. New Brunswick, NJ: Rutgers University Press.
Meléndez, E., and J. Hinojosa. 2017. Research Brief: Estimates of Post-Hurricane Maria Exodus from Puerto Rico. October. Center for Puerto Rican Studies. https://centropr.hunter.cuny.edu/…/RB2017-01-POST-MARIA%20EXODUS_V3.pdf.
Ostry, J. D., P. Loungani, and D. Furceri. 2016. Neoliberalism: Oversold? Finance and Development (June).
Pantojas García, E. 2007. Federal Funds and the Puerto Rican Economy: Myths and Realities. CENTRO Journal 2: 19.
Public Law 114-187. 2016. Puerto Rico Oversight, Management and Economic Stability Act. https://www.congress.gov/114/plaws/publ187/PLAW-114publ187.pdf.
Puerto Rico Committee to Study the Finances of Puerto Rico. 1975. Report to the Governor. 11 December.
Puerto Rico Junta de Planificación. 2008. Informe Económico Al Gobernador. http://jp.pr.gov/Portals/0/Economia/Informes%20Econ%C3%B3micos%20al%20Gobernador/Informe%20Econ%C3%B3mico%20al%20Gobernador%202008.pdf?ver=2014-11-21-110225-253.
Puerto Rico Junta de Planificación. 2016. Informe Económico Al Gobernador. http://jp.pr.gov/Portals/0/Economia/Informes%20Econ%C3%B3micos%20al%20Gobernador/Informe%20Econ%C3%B3mico%20al%20Gobernador%202016.pdf?ver=2017-04-07-070541-850.
Puerto Rico Report. 2012. Nutrition Assistance in Puerto Rico: What It Means to Be a Territory. July 6. https://www.puertoricoreport.com/nutrition-assistance-in-puerto-rico-what-it-means-to-be-a-territory/#.WntcuiOZPOZ.
Quintero, L. M. 2017. Golpe de la junta. El Vocero, 5 August.
Regis, J. A. Jr. 2016. PuertoRico-USA Foundation. 1 September. https://www.finance.senate.gov/imo/media/doc/Puerto%20Rico-USA%20Foundation1.pdf.
Reich, R. 2016.Why Liberal States Won America’s Tax Experiment. 9 December. http://robertreich.org/post/154264736880.
Riley v. California. 2014. 134 S. Ct. 2473.
Rohter, L. 1986. Puerto Rico Not Consulted on Contra Bases. New York Times, 31 October.
Ruiz, A. L. 1976. The Impact of the Economic Recession on the Puerto Rican Economy: An Input–Output Approach. Caribbean Studies 16 (3/4): 125–148.
Ruiz, A. L. 2016. Puerto Rico: Office of the Governor. Informe Economico al Gobernador. http://jp.pr.gov/Portals/0/Economia/Informes%20Econ%C3%B3micos%20al%20Gobernador/Informe%20Econ%C3%B3mico%20al%20Gobernador%202016.pdf?ver=2017-04-07-070541-850.
Ruiz-Marrero, C. 2002. Groups Ponder Benefits of Demilitarization. Puerto Rico Herald, 1 July. http://www.puertorico-herald.org/issues/2002/vol6n28/GroupsPonderBen-en.html.
Ryan, P. 2016. VERIFIED: House Bill Protects Taxpayers from Bailout, Requires Tough Choices from Puerto Rico. https://www.speaker.gov/general/verified-house-bill-protects-taxpayers-bailout-requires-tough-choices-puerto-rico.
Senior, C. 1953. Migration and Puerto Rico’s Population Problem. Annals of the American Academy of Political and Social Sciences 285 (January): 130–136.
Senior, C., and D. Watkins. 1966. Toward a Balance Sheet of Puerto Rican Migration. http://files.eric.ed.gov/fulltext/ED016720.pdf.
Sesin, C. 2017. Over 200,000 Puerto Ricans Have Arrived in Florida since Hurricane Maria. NBC News, 30 November. https://www.nbcnews.com/news/latino/over-200-000-puerto-ricans-have-arrived-florida-hurricane-maria-n825111?cid=sm_npd_nn_fb_lt.
Shanahan, J., and J. Lindsay-Poland. 2002. Update on US Navy Presence in Vieques, Puerto Rico. Fellowship of Reconciliation USA Archives. February.
Sotomayor, O. 2004. Development and Income Distribution: The Case of Puerto Rico. World Development 34 (8): 1395–1406.
Stengel, R. 2017. The End of the American Century. The Atlantic. 25 January.
Torres, I. 2017. Puerto Rican Government Asks U.N. to Reclassify Island as Territory. Caribbean Business, 19 June.
Torruella, J. R. 2016. Outstanding Constitutional and International Law Issues Raised by the United States-Puerto Rico Relationship. Minnesota Law Review (Headnotes) 100 (1): 79–102.
Towns, E. 2006. Disturbing Economic Trends in Puerto Rico. Congressional Record-Senate Extensions of Remarks E1551. 27 July.
Truman, H. S. 1952. Special Message to the Congress Transmitting the Constitution of the Commonwealth of Puerto Rico. http://www.presidency.ucsb.edu/ws/?pid=14089.
UN Commisión Económica para América Latina y el Caribe. 2004. Globalización y Desarrollo: Desfios de Puerto Rico Frente al Siglo 21. http://repositorio.cepal.org/bitstream/handle/11362/2726/S2002903_en.pdf;jsessionid=29368DCA38C18D84A23864EC62BACB3A?sequence=2.
UN General Assembly. 2016a. Special Committee on Decolonization Approves Text Calling upon United States Government to Expedite Self-Determination Process for Puerto Rico. https://www.un.org/press/en/2016/gacol3296.doc.htm.
UN General Assembly. 2016b. Special Committee on the Situation with Regard to the Implementation of the Declaration of Independence to Colonial Countries and Peoples. Decision of the Special Committee of 20 June 2016 concerning Puerto Rico. United Nations General Assembly. http://virtualboricua.org/decision-of-the-united-nations-special-committee-of-20-june-2016-on-puerto-rico/.
US Bureau of Yards and Docks. 1947. Building the Navy’s Bases in World War II; History of the Bureau of Yards and Docks and the Civil Engineer Corps, 1940–1946. Washington, DC: Government Printing Office.
US Department of Agriculture. 2016. Supplemental Nutrition Assistance Program (SNAP) Participation and Costs. https://fns-prod.azureedge.net/sites/default/files/pd/SNAPsummary.pdf.
US Department of Commerce. 1979. Economic Study of Puerto Rico. 2 vols. Washington, DC: Government Printing Office.
US Department of Commerce. 2000. United States Census. https://www.census.gov/prod/2003pubs/c2kbr-19.pdf.
US House Committee on Agriculture. 1983. Subcommittee on Domestic Marketing, Consumer Relations. Hearing: Review of the Nutrition Assistance Program for Puerto Rico. 20 June. 98th Cong, 1st Sess. https://babel.hathitrust.org/cgi/pt?id=umn.31951003070119m.
US House Joint Committee on Taxation. 1976. General Explanation of the Tax Reform Act of 1976. https://babel.hathitrust.org/cgi/pt?id=pur1.32754078697392;view=1up;seq=3.
US House Joint Committee on Taxation. 2006. An Overview of the Special Tax Rules Related to Puerto Rico and an Analysis of the Tax and Economic Policy Implications of Recent Legislative Options. 23 June. http://www.jct.gov/x-24-06.pdf.
US House Committee on Interior and Insular Affairs. 1976 Hearings Subcommittee on Territorial and Insular Affairs Committee Compact of Permanent Union between Puerto Rico and the United States on H.R. 11200 and H.R. 11201. January 20 and February 9. https://babel.hathitrust.org/cgi/pt?id=mdp.39015011947598;view=1up;seq=322.
US Senate. 1976. Senate Report No. 94-938. 94th Cong., 2nd Sess. https://www.congress.gov/congressional-report/94th-congress/senate-report/938/2.
US Senate Committee on Finance. 1993. Tax Policy: Puerto Rico and the Section 936 Tax Credit. Washington, DC: General Accounting Office.
US Senate Committee on Finance. 2015. Financial and Economic Challenges in Puerto Rico. 114th Cong., 1st Sess. 29 September. https://www.finance.senate.gov/imo/media/doc/20867.pdf.
US Senate Committee on Interior and Insular Affairs. 1950. Puerto Rico Constitution: Hearings. 84th Cong., 2nd Sess. https://babel.hathitrust.org/cgi/pt?id=umn.31951d02087230b;view=1up;seq=3.
US Senate Judiciary Committee. 2015. Hearings on Puerto Rico’s Fiscal Problems: Examining the Source and Exploring the Solution. Testimony of Mark Zandi, Chief Economist Moody’s Analytics: 114th Cong., 2nd Sess. https://www.judiciary.senate.gov/meetings/puerto-ricos-fiscal-problems-examining-the-source-and-exploring-the-solution.
US Senate Special Committee on Aging. 1992. Pharmaceutical Industry: Tax Benefits of Operating in Puerto Rico: Briefing Report to the Chairman. Washington, DC: General Accounting Office.
US Treasury Department. n.d. Puerto Rico’s Economic and Fiscal Crisis. https://www.treasury.gov/connect/blog/Documents/Puerto_Ricos_fiscal_challenges.pdf.
Velásquez, N. 2017. Report: A Discussion on the Future of Puerto Rico’s Economy. Compiled Statements. August. https://velazquez.house.gov/sites/velazquez.house.gov/files/FINAL%20-%20A%20Discussion%20on%20Puerto%20Rico%27s%20Future%20Event.pdf.
Velásquez, N., and J. Serrano. 2017. Letter to José B. Carrion Chairman Financial Oversight and Management Board for Puerto Rico. 11 May. https://votesmart.org/public-statement/1194052/letter-to-jose-b-carrion-iii-chairman-of-the-financial-oversight-and-management-board-for-puerto-rico-serrano-velazquez-send-letter-to-puerto-rico-fiscal-control-board-chairman-asking-for-transparency-of-expenses-and-disbursements#.Wntk9SOZPOY.
Villamíl, J. 2006. Comment. In The Economy of Puerto Rico, ed. Susan M. Collins, Barry P. Bosworth, and Migual A. Soto-Class. Washington, DC and San Juan: Center for the New Economy Brookings Institute Press.
About this article
Cite this article
Cabán, P. PROMESA, Puerto Rico and the American Empire. Lat Stud 16, 161–184 (2018). https://doi.org/10.1057/s41276-018-0125-z
- Puerto Rico
- Financial crisis
- Hurricane Maria