February 2005: Fiscal Crossroads in Puerto Rico

The PR government faces an enormous challenge to keep expenses aligned with revenues. For decades, the government has provided more goods and services to citizens than it can afford, thus confronting a structural deficit. The need to co-govern finds a fertile ground with two party platforms calling for tax reductions and more efficient public services. In sum, PR needs to increase revenues and reduce expenses to avoid further damage. In the end, the real challenge is fiscal reform. This issue discusses how revenues can increase via two types of taxes: the Value Added Tax and the Sales Tax. We present the facts; you decide which system is better for you and PR.

After good behavior in the 90’s, the oil market has gotten wrathful again. Since the very beginning of this century, oil prices have bounced back to put more strain on an already fragile world economy. Wars and conflicts might end, but oil prices keep pointing towards the sky and rattling the nerves of consumers and producers. An importer of more than 80 million barrels a year, PR cannot disregard the ravages of oil. This issue reviews the turmoil in the oil market and its causes. We navigate through the vast grid of oil in the economy and analyze how fit is our economy to deal with soaring oil prices. Don’t miss this interesting journey across the black gold world.