Samuel Studer
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Years of irresponsible management of money has left Puerto Rico in a serious debt crisis. Puerto Rico is similar to Greece in that it is highly indebted and locked in a union with a wealthier neighbor. Puerto Rico could be on path similar to what Greece was five years ago.

This August, the U.S. territory defaulted on debt, and the local government could run out of cash by early November. According to the Wall Street Journal, Puerto Rico is $72 billion in debt, and its public enterprises owe an amount equal to their 100 percent output. This would force the island to slash jobs and social programs, which would be devastating considering that Puerto Rico’s economy has been shrinking.

To avoid an economic disaster, a plan must come in play to boost the economy. Its debt must be restructured in order to help save it. Puerto Rico is different from a state in that it cannot file for bankruptcy. Leaders in the Obama administration would like to change that. Such a move would allow creditors to have the supervision of the court system to get some of what they are owed.

It has also been brought up that Puerto Rico should be granted statehood. With a restructure, it could lead to better jobs. It would also make it easy for the island to declare bankruptcy.

The island’s economy is not going to be strong anytime soon. It is going to take hard work and big overhaul to see changes. Just like the United States, Puerto Rico had a housing boom, crash, and recession. Yet its economy has not recovered because the tax breaks that got people to come are long gone. The territory also faces low education rates, mismanaged funds, and labor laws. There is also a law in place that cargo going from Puerto Rico and the United States must travel on expensive U.S ships, boosting costs. Another issue facing the island is that programs such as welfare and disability insurance have high benefits. This then allows for people not to work and benefit from these programs. Some have joined an underground network of jobs in which they do not have to pay taxes, an economy free from the government.

The situation of Puerto Rico must be handled in a professional matter. Granting Puerto Rico statehood is not the answer, because we cannot afford to add more debt to the United States’ already heavy debt load. However, the U.S. should be able to support and help in any way possible such as passing legislation to help monitor a repayment plan for Puerto Rico’s creditors. It is not our responsibility to take on Puerto Rico’s debt. Understanding what has gone wrong is the first step. Then, we need a plan to create a solution, and the United States should help with that process. Finally, it is up to Puerto Rican officials to help rebuild the island that was once so great.