Two sides, same coin: Our fiscal crisis is your fiscal crisis

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A $72 billion debt looms large over a small island in the Caribbean and its 3.8 million residents.

Gaby Morera

Gaby Morera

Puerto Rico is swaying under the weight of the debt, and it’s taking a toll on its citizens. Essential services such as education and health care are at risk.

The limbo-like situation created by Puerto Rico’s status as an unincorporated territory makes it impossible to file for bankruptcy. Unlike American cities, Puerto Rico cannot file for court-arranged bankruptcy reorganization. And unlike sovereign countries such as Greece, its government can’t seek emergency assistance from the International Monetary Fund.

So what is a small island to do?

I’m no economist, so the situation eludes me — even as a resident of the island. What I do know is that President Barack Obama signed the PROMESA bill into law on June 30, 2016. This law enables Obama and congressional leaders to name seven representatives to serve as a federal fiscal oversight board for Puerto Rico, essentially taking away fiscal control from the Puerto Rican government. Our governor, Alejandro García Padilla, could name one non-voting representative to the board.

Obviously, the Puerto Rican government doesn’t have the best fiscal track record. We got ourselves into this debt in the first place, but there should be a better answer than just seizing control of the island’s finances. When did we collectively jump into a time machine headed for the colonial era?

Many Puerto Ricans wonder the same thing. During the fiscal oversight board’s first meeting, which lasted less than 20 minutes, protesters yelled things like “this sounds like slavery,” and “Puerto Rico has been a colony for over 500 years, and it’s enough.”

The need for a fiscal board is bad enough. If the situation gets more dire, will we go back to the times where the U.S. government elected our governor and officials? Is our right to democracy at risk? Do we even have rights as “colonial subjects”?

The problem is Americans see this as “our” problem. We created it — or at least, our government did — by borrowing money we didn’t have the means to pay back. But, the U.S. has a stake in this, just as we do.

The fact of the matter is even if our government acted irresponsibly with our funds, some laws the U.S. has enacted over Puerto Rico do not help the matter.

The Jones Act is Section 27 of the Merchant Marine Act of 1920. This law prohibits Puerto Rico from developing its own shipping industry. This means all of the boats that come into Puerto Rican harbors bringing imported goods must be American vessels. This comes with a whole set of fees that are later charged to Puerto Rican consumers, making goods almost 15 to 20 percent more expensive.

Why am I talking about this seemingly unrelated cabotage act? Well, economists from the University of Puerto Rico have estimated the Jones Act has cost Puerto Rico around $576 billion, which would be enough to pay off our current debt seven times.

The two things are not completely correlated, but it’s an example of how our ties with the U.S. have negatively affected our economy. Both nations are inevitably linked — one nation can’t ignore the actions of the other.

This isn’t just a Puerto Rican problem. Our economy tanking is making more and more families move to the mainland U.S. every day, which means states have to spend more money educating our children and assisting those Puerto Rican migrants. 

This is the largest exodus in 50 years. It is estimated that one doctor leaves the island every day. What will happen when all the doctors are gone?

If the economic crisis in Puerto Rico doesn’t scare you, think about all the people who because of this crisis will lose their medical professionals. This is especially pressing when you consider the fact that Zika has been quickly spreading across the island.

Puerto Rico might be small, but if ignored, mismanaged or reduced to an even more colonial status, we will not be silent. If our island is actually your island, our debt is actually your debt.

There has to be a better way to handle this without taking us back a century.

Gaby Morera, ’17, is a managing editor for The Brown and White and a native of Puerto Rico. She can be reached at [email protected]

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2 Comments

  1. Statehood is a clear solution. As the 51st state, Puerto Rico would have full rights and responsibilities of citizenship, including senators and congressmen, the right to vote for the president, and equal federal benefits, none of which the territory now has. A territory is powerless, but a state has rights.

  2. Pingback: Blog 6: Let’s talk about bankruptcy | Gaby Morera Di Núbila

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