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Opinion for The Latino Newsletter

As Puerto Rico braces for a looming economic crisis, the government in San Juan remains politically paralyzed and economically directionless. Federal funds are drying up. Pandemic-era aid is ending. Medicaid allocations face steep reductions. Billions in emergency spending that have kept the colonial economy afloat are winding down. Yet, the pro-statehood PNP leadership continues to act as if Washington’s fiscal faucet will flow forever. It won’t.

Puerto Rico is heading for a financial reckoning. And this time, there’s no coherent and viable plan from La Fortaleza or its Washington allies to cushion the blow. But while the colonial government clings to fantasy and dependency, the pro-sovereignty initiative Plan B: Independencia has released what no party in power has managed to offer the Puerto Rican people: a bold, detailed, and forward-looking National Economic Development Plan to rescue the country from collapse and forge a new future as a prosperous, sovereign republic.

This plan, co-authored by Dr. Martha Quiñones Domínguez, myself, and other experts, lays out the most comprehensive economic roadmap Puerto Rico has seen in decades. It details how a sovereign Puerto Rico can not only survive —but thrive— through a mix of industrial policy, fiscal sovereignty, global trade integration, and a transformative Transition Fund to jumpstart development and secure intergenerational prosperity.

Billions in National Revenue, No Federal Dependency

The heart of the plan is a diversified, sovereign revenue system that could yield between $17.2 and $23.3 billion annually through a modern 10% Value-Added Tax (VAT), progressive income taxes, a flat 10% corporate tax, and customs duties under Puerto Rico’s own jurisdiction. That doesn’t even include projections for year 20, where revenues could reach $51 billion through expanded manufacturing, fintech, sustainable agriculture, and tourism sectors.

For the first time, Puerto Rico would collect port fees, overflight charges, landing fees, and excise taxes currently pocketed by the U.S. federal government. Combined, these alone could bring in up to $4 billion a year by year 20. It’s the type of fiscal power every nation wields—except colonial Puerto Rico.

To ensure stability in the first two decades of sovereignty, the plan proposes a Puerto Rico Transition Fund financed by the U.S. federal government, either through annual $36 billion disbursements over 20 years or a one-time $489 billion lump sum using standard Net Present Value (NPV) methodology. Contrary to political fearmongering, this is not a “handout.” It’s a fiscally responsible investment that would save the United States approximately $231 billion in long-term liabilities, while ending perpetual appropriations to a politically disenfranchised colony. With independence, the U.S. would save over $617 billion in long-term federal funding.

More importantly, it empowers Puerto Rico to plan for the long term, rebuild public institutions, modernize infrastructure, and eliminate its dependence on Washington’s political whims.

A Four-Phase Strategy

The plan outlines a phased approach:

• Phase 1 (Years 1–5): Institution-building, tax reform, energy, and infrastructure renewal.

• Phase 2 (Years 6–10): Industrial expansion and digital economy growth.

• Phase 3 (Years 11–15): Global trade, tourism, offshore finance, and R&D.

• Phase 4 (Years 16–20): Fiscal self-sufficiency, economic consolidation, and revenue maximization.

At every step, the emphasis is on sovereignty, productivity, and dignity, not dependence.

Aligned with international law, the plan also invokes the doctrine of odious debt to reject Puerto Rico’s illegitimate colonial debt incurred under a U.S.-imposed colonial regime without democratic consent. Instead of paying Wall Street, a sovereign Puerto Rico will invest in its people through sovereign wealth funds, innovation hubs, and national development banks.

The Moment to Choose

Let’s be clear: Puerto Rico is not heading toward crisis. We are already in it. Our youth are leaving. Our institutions are crumbling. Federal funds are vanishing. Yet the ruling colonialist class has no plan, no strategy, no answers. 

Plan B: Independencia does.

It offers a credible, comprehensive vision backed by economic modeling, global comparisons, and fiscal realism. It proves that sovereignty is not just a political dream - it is an economic necessity.

We cannot afford to wait. The future will not be written by those who avoid hard truths, but by those willing to prepare for them.

Puerto Rico can be sovereign. Puerto Rico can be prosperous.

But only if we plan for it.

And fight for it.

About the Author

Javier A. Hernández is the co-author of “Puerto Rico: The Economic Case for Sovereignty” and a co-author of the National Economic Development Plan for a Sovereign Puerto Rico.

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SCOTUS and Birthright Citizenship: The Associated Press reports that the Supreme Court “seemed intent Thursday on maintaining a block on President Donald Trump’s restrictions on birthright citizenship while looking for a way to scale back nationwide court orders.”

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