The Governor of Puerto Rico says the U.S. commonwealth territory is simply unable to pay its debt, which now stands at a jaw-dropping $73 billion. Alejandro Garcia Padrilla, inaugurated in January 2013, has called in specialist advisers to work with him, and, rather onerously, one of them is Steven Rhodes, the adviser on the Detroit bankruptcy. His view of the situation is clear – the “insolvent” island “can no longer pay its debts, it will soon run out of cash to operate, its residents and businesses will suffer.”
Now being called “The Greece of the Caribbean” or “America’s Greece,” the island has a population the size of Oklahoma and a GDP the size of Kansas. However, the debt of Puerto Rico, as it stands now, is 50 times larger than the average debt of the 50 states. In fact, only New York and California have more debt. 40% of its citizens live in poverty and the unemployment rate is 12%. The island has technically been in recession since 2006. And, more worryingly, nearly all of Puerto Rico’s debt is owed to the U.S. financial system.
The debt situation with Puerto Rico mirrors Greece in many ways. However, there is definitely one distinct difference. Greece owes the U.S. approximately $14 billion; Puerto Rico owes many, many more billions than that. If you believe we are witnessing financial mismanagement on an unprecedented scale, please Like & Share this post.
