Puerto Rico Economic Pulse ©

November 2010: Will PR Consumers Save this Economy?

An analysis of the current economic policy in Puerto Rico

The Governor of Puerto Rico, Hon. Luis Fortuño said in November 2010 “History has taught us that indeed, a dollar in the hands of Puerto Rican consumers generates more economic activity than a dollar in government hands”. With this statement, the current administration announced a pragmatic economic policy oriented to reduce personal and corporate income tax rates as well as inviting consumers to spend on retailers throughout the Christmas’s season. Government seeks to boost the local economy with consumption. The PR economy has suffered a long and deep recession, whose causes are mixed. This issue analyses the reasoning behind this kind of measure, its implications, the current economic situation, and its possible net effects. The main question right now is will Puerto Rican consumers save this economy? Is there an alternate plan in case this policy does not work?