• Puerto Rican Reforms (The Money Hole @8PM ET)

      The media spent so much time covering union protests in Wisconsin, that I mostly missed a much bigger protest over much bigger (17,000 government workers fired!) cuts in Puerto Rico.

      When Luis Fortuno became governor in 2009, Puerto Rico's economy was a mess.

      Or, as he told me:

      "Not just a mess. We didn't have enough money to meet our first payroll."

      But he avoided bankruptcy by getting an emergency loan, and immediately cutting Puerto Rico's government. For once, government shrank. Fortuno and the conservative legislature:

      •Laid off 17,000 government workers

      •Froze all salaries in government

      •Cut government spending by 20%

      The changes were more sweeping than any state's, so it's no surprise that the protests were also more ferocious. Demonstrators clashed with the police in front of the governor's mansion. Some carried signs calling him a fascist and a Nazi. One poll shows that if an election were held today, Fortuno would lose, 47 to 25%.

      But the benefits of Fortuno's small government policies are only starting to be realized. It wasn't until this Janurary that Fortuno used the savings from his cuts to reduce corporate taxes from 35 to 25%. He also cut state income taxes in half (a change that will be phased in until 2014.)

      600 construction permits were issued in last few months. Wal-Mart, CostCo, Coca-Cola, and pharmaceutical companies are moving to or expanding in Puerto Rico. Soon, they will provide thousands of new jobs.

      Once people notice that, Fortuno may become popular again. Ronald Reagan, Gov. John Engler of Michigan, and Gov. Gary Johnson of New Mexico all suffered drops in public support when they pushed for small government - but won re-election when people realized that the cuts helped the economy.

      Many of those government workers who were laid off in Puerto Rico now do productive things. In my special, Mayra Gonzalez says she's now GLAD she was laid off because it got her to start her own company. She named it "Law 7" - after the law that fired her.

      Good things happen when the government gets out of people's lives.

      The Money Hole airs Sunday at 8pm EST. It repeats at 11pm.

      The Money Hole