Should old people move to Panama?

Panama has started a bidding war for retirees:

To attract more investment, the central American nation has eased
immigration laws and set up a discount bonanza for expatriate
pensioners that includes 20 percent off professional services such as
those provided by lawyers, architects and physical therapists; no
property tax for 20 years; no income tax on income earned outside
Panama; and a 50 percent discount on real estate closing costs.

And
that’s only the beginning. The list of discounts goes on and on,
including price breaks on telephone service, surgery and domestic
airfares and a one-time waiver of duties on imported household goods up
to $10,000.

All it takes to qualify is pension income of $500 or more per month — at any age and from any source.

Here is the story

I can think of four relevant models here.  1. The Panamanian government is simply stupid.  2. In Panama most prices are well above marginal cost, making this a good deal for the nation as a whole.  3. The Panamanian government has a preference for sources of wealth which will not get involved in politics.  4. The Panamanian government believes that the greater number of residents will result in a more efficient spreading of fixed costs.  I put my money on #2 and #3, and do visit Panama if you have never been; it is far more interesting than the now overtouristed Costa Rica.

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