A few people who keep close track of their expenses have told Me that prices seemed to have gone up about 12-15% in supermarkets, department stores and drugstores. Not on all items, for that impact would be like shooting out the tires of Our consumerist economy, but on a wide variety of products.
Services have also been hit, as I paid a 7% tax on the cremation services for My dad after the price had already gone up about 7%, for a total impact of roughly 13%. According to the law, services are exempt from taxation...but there it is. I'll be talking to the Department of Consumer Affairs about that tomorrow. And now local hospitals want to raise the charges on their services some 13%.
Do ya see a trend here, matey?
Let Me quote the Magnificence of Me:
"...a consumption tax at the point of collection causes an 'impact cost rise' of between 11 and 18%, on average."
Like a true Jenius, I was standing on the shoulders of Giants to make that statement and the evidence--based on decades of economic activities around the world--is hitting Us squarely in the pocketbook.
Some of you will note We're still at the "low" end of the average, but here's an even harsher awakening: Puerto Rico's economy tends to higher prices anyway, so the overall pricing impact could easily exceed 20% by 2008.
--We're an island, subject to higher logistics costs made worse by the U.S. imposition of cabotage restrictions through the Jones Act.
--We have a weakening economy that is less productive now than it was during the last economic boom and has failed to find a coherent strategy or cohesive economic engine.
--Corruption is widepsread and institutionalized; money spent to "grease the wheels" needs to be recovered somewhere else--legitimately--thus higher prices. (See "construction," "government contracts" and "business permits.")
--The current exodus of middle-class families combined with increased immigration/return of destitute and near-destitute individuals creates not only a widening economic gap, but also a burgeoning economic "underclass" with fewer options. Those with fewer options pay more because they have to, or turn to crime, which adds a security cost on top of the tax cost.
And what have The Fools done now? They've put up a bill to give all public employees automatic raises, too! Forget about defending the indefensible deal The Fools have: Just bribe the big herd of idiots out there into silence and who cares what the cost will be? And if the tax monies are to pay for the raises, then what about the "pledge" that the tax monies were going to improve Our infrastructure?
A percentage here, a percentage there, a little bill here and a huge bill down the road, one that sells Us off to dwell in Mammon's cloaca. I can't wait for 2008!
The Jenius Has Spoken.