The Puerto Rican economy is in trouble, going through a recession and dealing with about $70 billion in total outstanding debt. The commonwealth paid only $628,000 toward a $58 million debt bill due Monday to creditors of its Public Finance Corporation. Governor Alejandro Garcia Padilla is desperately trying to come up with a restructuring plan to eliminate the debt.
Just how bad is it? People are leaving the island in search of a better life elsewhere. In fact, unemployment in Puerto Rico is more than double the rate in the mainland United States. Three thousand doctors have moved out in the last five years, as have many other professionals headed to the U.S. to earn a better living.
Puerto Rico is in a debt crisis because the government has overspent for years while the island's economy has shrank. The commonwealth borrowed too much money trying to offset declining government revenue, and bonds were gobbled up by U.S. investors because the interest is often "triple tax exempt," or the holder does not have to pay city, state or federal income taxes.
But regardless of the reasons right now, the question is: where will the money come from to eliminate the debt? Unlike the city of Detroit, which faces a serious debt problem, Puerto Rico won't be able to seek protection under municipal-bankruptcy statutes, and a bailout of any kind from the U.S. is highly unlikely.
Could marijuana legalization save the Puerto Rican economy? Right now, marijuana possession in Puerto Rico is a serious crime and first-time offenders are slapped with a felony, two to five years in prison and up to a $5,000 fine. But with legalized pot, Puerto Rico can use the tax revenues and fees it collects to help pay off the debt.
Legalized pot is a win-win for everyone. It stimulates the economy while giving the people what they want. Let's face reality: the United States government, for example, like other countries, continues spending money every year trying to stop American's from getting high, but the drug war hasn't stopped Americans from doing drugs. You can buy any drug you want in any city in America without knowing anyone by simply approaching a few people. Finding a drug dealer is easier than buying beer at 7/11, and they don't even ask for ID.
Legalized pot is big time business that could bring in millions of dollars to the Puerto Rican government, pay off the debt and give the people what they want. Look at Colorado: last year it received $60 million in taxes and fees from marijuana. Not only that, but the state also saved roughly $145 million fighting marijuana. Just as Colorado put the majority of the earnings in a fund to build new schools, Puerto Rico could use the money to pay off its debt, improve the economy and give its citizens reason to stay on the island.
If you look at the bigger picture, legalized pot could strengthen even the worst struggling economy and make a good economy that much stronger.
Pedro Pierluisi, Puerto Rico's non-voting delegate in Congress told CNBC, "It is the first time in Puerto Rico's history that the government fails to honor one of its payment obligations. Regardless of the fact that the Constitution of Puerto Rico does not specifically guarantee this payment, it is the moral obligation of our government [to pay its debts], at the very least."
Pierluisi is right, and one way to do that is through legalized pot. The people that say hard drugs cannot be legalized are kidding themselves. Millions of Americans are using them every day. The only logical solution is to stop spending money trying to slow them down. It isn't right, it doesn't work, and there is a desperate need for that money right now.
Let's be clear: I'm not advocating drug use. Drugs scare me. What I'm suggesting is applying critical thinking on an issue where none exists. There is a serious problem facing Puerto Rico and many other economies around the world, and legalized marijuana is a very viable solution.