To ease austerity and deal with debt, Puerto Rico should follow El Salvador’s path and legalize bitcoin.
I knew about Bitcoin as an idea in 2017, but not as a global phenomenon. I had no idea Bitcoin was an antifragile, sovereign monetary system that could compete globally with the US dollar. The anarcho-capitalist cypherpunk ideologies of power, value, individual liberty, and mutualist communal sovereignty surprised me.
The relevance of current monetary theory in global governance, US statecraft, and academics was unknown to me for a long time. To me, mining was a way for my libertarian friends to earn money. It happens by running a server at home and keeping or spending it as digitized, ethereal blockchain cash on the internet.
Bitcoin as a Savior
In the summer of 2021, while planning the syllabus for my fall UN class, I got the opportunity to lecture at the University of Delaware. I felt inspired to add current events in the teaching. So, for the first time in a long time, I started reading about Bitcoin on my summer reading list.
Angrynomics, New Money: How Payment Became social media, and New Money: How Bitcoin Became social media are all wonderful books about the benefits of worldwide Bitcoin adoption. When I created a syllabus for a course on worldwide Bitcoin adoption, I felt confident.
We both agreed that Bitcoin solves the problem of American household debt and inequality produced by the use of the US currency globally. a system that produces financial troubles for Americans by increasing useless investments and debt in the US. Asymmetrical mechanisms like Bitcoin, the gold standard before WWI, can keep a functioning trade system running by keeping global demand for American financial assets in check. Puerto Rico has been a canary in a coal mine for the US for almost 50 years. Puerto Rico’s deficit grew before the rest of the US.
Deindustrialization meant less money and more money spent on imports. Foreign savers acquired American assets, causing low domestic savings rates, excessive borrowing, and greater debt.
Bringing Puerto Rico back at its feet
In 2017, I began to consider the research project that would become my doctoral dissertation. Hurricanes Irma, Maria, Harvey, and Nate, which devastated the US in August, September, and November last year, caused unthinkable destruction and death tolls. Hurricanes Irma and Maria wreaked havoc on Florida and Puerto Rico’s infrastructure.
This caused problems in energy, transportation, communications, water supply, and wastewater treatment networks and systems. These blunders increased the breadth of the crisis and made it worse. When issues with the US dollar arose in the late 1990s, they exacerbated an already severe sovereign financial crisis.
I wanted to know how Puerto Rico got so much debt that bondholders and hedge funds could buy it cheaply. I had no idea that Puerto Rico’s debt issue would soon affect the rest of the US due to the failing worldwide dollar system, but it did.
That way, I could come up with smart policy proposals. This is to help Puerto Rico get back on its feet and strengthen its political economy. Most academic literature about Puerto Rico’s debt problem is shallow and unworkable.
Bottomline
Reading a lot of professional literature about the island and its debt crisis revealed this. Many well-known intellectuals and activists haven’t even considered how to tackle the problem or what solutions to advocate. Instead, they constantly criticize! Neoliberalism is always to blame.
Academe builds straw man arguments to illustrate the injustices of capitalism and Western values, only to destroy them and propose nothing new. Many thought leaders criticize whatever people do to improve their lives under neoliberal standards. They can’t think outside the Keynesian box, so they add more Keynesianism to the mix. It’s a bad concept.
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