get it while you can?

Some of the motivation of moving to the US Virgin Islands now is the economic situation, which is similar to the one faced by Puerto Rico, another US territory. US territories are part of the United States – but residents cannot vote for president (rather, they don’t have anyone representing them in the electoral college) and their representatives cannot vote in the House of Representatives. Begs the question “Why have a representative if that person cannot vote.” Politics.

The US Virgin Islands are in a serious money crunch. Reuters has a nice article on this: “Shunned from bond market, U.S. Virgin Islands faces cash crisis.” Some highlights:

  • More than $2 billion is owed to bondholders and creditors
  • Bond status is ‘junk’ after a failed bond issue earlier this year
  • Current budget calls for a 10% decrease in public spending
  • Debt load is more than 50% of the Gross Domestic Product
  • Government owes $28 million to the Water and Power Authority (WAPA)
  • WAPA owes $44 million to (former) fuel vendors
  • Public pensions and healthcare payments are $3.4 billion behind
  • Bondholders and creditors are paid before pensioners

It’s hard to see how the US Virgin Islands will not end up like Puerto Rico. Garbage holders called their strike off and secured a 30-day delay in a new fee. The cruise ship industry is avoiding much of the US Virgin Islands in favor of other Caribbean islands. Though cruise ships may be a necessary evil for many islands, not having them means not having tourists.

In an effort to secure more cash, the USVI government recently assessed a $25 per day fee to use a timeshare. I’ve never owned a timeshare and never will, but for some people they are a convenient way to stay in a far-off place. According to the Marketplace article this money will go into the government’s general fund. If people using timeshares do so with a budget, one can imagine that $25 per day is the same amount not getting spent on local goods and services. That’s money not benefiting the island or her people – it’s paying off debt racked up by a government.