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President Trump calls on New Mexico to change its name to ‘New America’
(edition.cnn.com)
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And that’s basically it!
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New Mexico predates the modern country of Mexico, yes.
But when Spanish Conquistadors first reached the Valle de Mexico, in the 1520s, it was the most densely populated urban area on the planet at over a million people.
That's why New Mexico includes "new", because it wasn't the original.