In a conversation with Chris Borg, president of BorgSolutions, We discovered a shared conclusion: Puerto Rico will have a crisis by March, 2007.
Both Chris and I--and presumably quite a few of Us--note that with the imposition of a 7% sales tax starting November 15th, the Christmas retail season, usually the largest spending period of the year, will be seriously dampened. This coming on the heels of the second-best yearly buying period (Mother's Day) being steamrolled by the government's fake economic crisis. End result: A vacuum of about 9-14% in total sales for the year. Could be higher; if it is, the howls will begin in late January.
Though the sales tax will supposedly increase government revenue, it will actually break even or lead to a decrease in overall revenue, at least for 2007. The reasons are easy to list:
---Poorly-applied tax leads to massive confusion.
---Massive confusion in taxes leads to under-payments; some are accidental, many are on purpose.
---Consumption drops: expected revenue goals are not met.
---People leaving the Island reduce the tax base.
---People buying off-Island (Internet, everyone?) reduce the revenue base.
---The underground economy grows as it becomes more lucrative to use. (Cash is Emperor!)
Unlike Chris, who believes the sales tax revenue goal will be 95% covered by large retailers, I believe that when the tide drops, the whole fleet, from aircraft carrier to dinghy, drops, too. And when the drop becomes a reality, shortly after the Christmas period ends (about late January, cuz We got a Christmas period that makes Exodus look like a day-hike), the government will see its stupidity dangling like a mangled foreskin and all Purgatory will break loose again.
What will the pattern be? I suspect that a private sector strike will be the spark and the fuse will be lit when government employees join in. A sidebar issue of importance will be loss of control (authority dethroned) in school environments. (Societal tensions often manifest themselves first in classrooms and campuses.)
And when--not if, when--the government announces that "There isn't enough money to complete the fiscal year," (don't gape at Me: it will happen) the excreta will hit the rotating oscillator. And We'll be on the receiving end of a feces spray like We never could have imagined.
Pessimistic? Maybe. But is there anyone out there, any of Us, willing to bet against this?
The Jenius Has Spoken.