We’re all familiar with the Latin phrase cui bono? — “who benefits?” Less familiar, perhaps, is cui detrimento? — “to whose detriment?” With that in mind, today I thought we might examine the issue of potential Puerto Rican statehood.
As I’ve written before, if Democrats were to win the trifecta in 2028, statehood for both Washington, D.C., and Puerto Rico will be on their agenda. But the two situations are very different. Admitting Washington, D.C., raises complicated constitutional questions and enters unsettled legal territory. Puerto Rico, however, is legally straightforward.
Under Article IV, Section 3 of the Constitution, Congress has broad authority to admit new states. Congress passes a bill, the president signs it, and the new state joins the Union. No constitutional amendment is required, and Puerto Rico fits squarely within that framework. The island is already a U.S. territory, and its residents are American citizens. Legality, therefore, is not the issue. The real issue is economics — more specifically, productivity, fiscal dependency, and the long-term impact on the American taxpayer.
Cui bono?
Let me begin by saying I like Puerto Rico: I was stationed there for a while, and I enjoyed the people, the culture, and it’s natural beauty. But if Puerto Rico were admitted to the Union, the Democrats would gain two Senate seats and several House seats. The exact number of House seats is uncertain because the House is capped at 435 members, meaning Puerto Rico’s admission would redistribute seats rather than add them outright. In practical terms, four or five existing states would likely lose a seat to make room. Politically, the beneficiary is obvious.
Puerto Rico’s GDP resembles that of a mid-sized state, yet its GDP per capita ranks below every state in the Union. GDP per capita is critically important because it reflects how much economic value an economy generates per resident, which in turn influences income levels, tax capacity, and the ability to sustain public services. High GDP per capita generally signals strong industries and a broad tax base; low GDP per capita signals the opposite. When Puerto Rico trails even the poorest states by this measure, it raises a legitimate question: who ultimately carries the fiscal burden?
Cui detrimento?
Federal programs such as Medicaid are designed to direct more support toward lower-income populations. As a result, a state with lower per-capita income receives substantially more federal dollars per resident and Puerto Rico would become the largest net recipients of federal support of any state in the Union on a per-capita basis.
Supporters of statehood argue that admission would naturally close Puerto Rico’s economic gap with the mainland. But they never explain with any specificity how that would occur, and economic convergence does not happen automatically. Closing the GDP-per-capita gap requires structural reforms such as higher labor-force participation, stronger workforce development, improved schools, competitive industries, reliable infrastructure, and sustained private investment. Puerto Rico possesses certain strengths — pharmaceuticals and tourism among them — but it also faces long-standing structural problems, including limited economic diversification and severely deteriorating infrastructure. Admission to the Union would not magically solve those problems.
Puerto Rico’s economic struggles have persisted for decades despite billions in federal assistance. The causes aren’t surprising: heavy government debt, dependence on federal tax incentives, population decline, bureaucratic dysfunction, high energy costs, and most of all, aging infrastructure, which is the island’s single greatest weakness.
When its notoriously unreliable electrical grid fails, the consequences ripple through every aspect of daily life. Water systems fail. Hospitals lose stability. Internet access becomes unreliable. Refrigeration, food supplies, businesses, and public health are all affected. That is hardly the kind of environment that encourages long-term outside investment.
Economically speaking, a state’s GDP per capita feeds directly into the federal balance sheet. A lower-output economy generates less federal tax revenue per resident while simultaneously qualifying for higher levels of federal assistance per resident. Lower inflows combined with higher outflows define the fiscal concern. If admitted as a state, Puerto Rico would contribute less in federal taxes while receiving substantially more in federal benefits, further increasing pressure on the nation’s debt and deficit.
In practical terms, Puerto Rico’s admission would represent a long-term federal subsidy commitment paid for by the American taxpayer — to whose detriment the matter ultimately falls.
Meanwhile, what cannot be overemphasized is that Puerto Rico’s infrastructure is in worse condition than that of virtually any state in the Union. Estimates for modernization begin in the tens of billions of dollars, with some projections exceeding the dollars allocated to infrastructure in all fifty states under Biden’s 2021 infrastructure bill. By the way, how are the roads in your neighborhood?
At the same time, this raises a broader question about governance and institutional performance. There’s an old saying that “the best predictor of future performance is past results,” making the issue not whether Puerto Rico needs additional federal funds — it does. The real question is whether the political leadership and governing institutions that have struggled to manage existing resources are politically and culturally capable of producing materially different results going forward.
Quote of the Day: When analyzing liberal policy, it’s wise to ask three questions – Compared to What? What are the Costs? Where’s the Hard Evidence? – Thomas Sowell