Monthly Archives: September 2017

Will Hurricane Maria provide the excuse for Congress to bail out Puerto Rico?

Puerto Rico’s electric utility was already effectively bankrupt.  Now, most inconveniently, Hurricane Maria has knocked out power to the entire island.
We predict that that hurricane will provide the cover for Congress to provide a massive bailout—effectively leveraging the tragedy of Maria to cover for its previous woes too.
Perhaps it’s unseemly to discuss now at this time that calls for compassion.  But the hurricane could well provide, shall we say, a glaring silver lining for this island that will allow it to escape accountability for its decades of corruption and mismanagement.
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Win-win: How about creating that libertarian paradise in Barbuda?

Hurricane Irma destroyed Barbuda, forcing evacuation of the island’s 3,000 inhabitants.  Media reports suggest that it will cost around $250M to rebuild the tropical paradise.  The territory is, of course, part of the country of Antigua and Barbuda, which has a relatively high standard of living.

In lieu of focusing on seasteading, how about a bunch of rich libertarians get together and, though a market solution, try to purchase the island, rehabilitate it, and create a new sovereign state?

Maybe offer $500M to the government of Antigua and Barbuda to cover the costs of permanently accommodating former Barbuda residents on Antigua and to compensate them for the lost territory.  Given the country’s fiscal challenges, this could be a nice nest egg, covering about half of the annual government budget [PDF].  Add in the $250M to rebuild Barbuda.  (We have little doubt that enterprising, profit-motivated Americans could manage it cheaper.)

Offer, say, $100,000 to compensate each resident of Barbuda who chooses not to return.  If half of them take you up on it, that’s $150M.  (Better yet, determine the fair value of their private losses and compensate them; we doubt that it would be anything close to an order of magnitude higher than $100K on average.)  Invite those who decline the opportunity to return under the new system.  Budget $50M to build the hardware and software of a new (minimalist) national government.

So, for less than a billion dollars, we could possibly have a new state.  Peter Thiel alone could cover this.  The new owners could begin selling parcels of land, privatizing government-type services, and creating a true libertarian paradise.  It’s easy to envision them recouping their investment while creating a society that would soon become the richest per capita in the world.  Think of the prospects for tourism, retirement homes, and financial services alone.  The geography and weather (minus the occasional hurricane) are a good start.

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