Islands serve a not dissimilar purpose in economics. The consequences of certain political, policy and economic choices tend to be much more evident much earlier than for comparable populations in large integrated economies. In part this is because, in a large, geographically integrated location, the consequences fall into the unseen category (Bastiat). If you raise property taxes in your metropolitan area, how does that affect your population size? On an island, ceteris paribus, you see a decrease in population because people leave. Sometimes because they take the increase as a marker of future increases, or as a sign of failure or because they can no longer afford to live on the island. Whatever the reason, they leave and their numbers are pretty apparent.
In an integrated geography though, it is less apparent both in magnitude and temporally. You increase taxes in the metropolitan are and population will eventually move to the suburbs. Houses won't go empty but their prices will fall. You won't see fewer faces in the city during the day because people still commute in from the suburbs. Freedom of physical mobility is one of the greatest constraints on abuse of power or incompetence in administration - but it grinds slowly. On the island, there it is, very quickly.
Something of this nature is happening in Puerto Rico. Long known for large and questionable government and now in deep financial trouble, as reported by Walter Russell Mead in Young People Abandon Puerto Rico .
On top of ravaged finances and poor credit rating, Puerto Rico now has another problem: Its citizens are fleeing the island in droves. Since 2000, Puerto Rico has lost nearly 300,000 people to the mainland—a large number considering the total population of 3.6 million. What’s more, the exodus is only speeding up, with an average of 54,000 leaving the island over the past few years. And with the unemployment rate hovering near 15 percent, nearly double that of the mainland, the trend shows few signs of reversing.On the mainland, local governments pursuing ruinous policies can hide for a long, long time (Detroit for fifty years) complaining about structural changes in the economy, discrimination by the state or the feds, or claim success when the numbers belie them. But sooner or later it catches up. Sooner or later you run out of other peoples money. Far better not to pursue the ruinous policies in the first place. The problem is that they don't ever look ruinous in the first place. They are altruistic and reasonable and logical. They just aren't affordable.
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