While Puerto Rican politicians took actions that exacerbated the island’s debt, they were operating within very small parameters set for them by Washington, having had little say on federal policies that have affected them ever since Puerto Rico became a US territory in 1898.
After World War II, as the rest of the US was going through the post-war economic boom, the federal government sought to modernize Puerto Rico’s largely agricultural colonial economy and bring industry and manufacturing to the island though various tax breaks.
The pension debt is particularly worrying because as young people leave for better opportunities elsewhere, Puerto Rico’s elderly are making up a larger and larger share of its population, and are putting strains on its Medicare and Medicaid system.
Securities firms in New York were able to charge Puerto Rico higher underwriting fees than those that places like Detroit had to pay, further contributing to the island’s problems.Eleven years later, Puerto Rico debt has skyrocketed to billion – and that’s not even counting the .2 billion it owns its own people in pension payments.But even though Puerto Ricans voted to do so this past June, the only ones who can actually make that happen are the voting members of Congress.At a press event in Puerto Rico in Hurricane Maria’s aftermath, Trump made the seemingly outlandish claim that he would forgive the island’s debt.When US bankruptcy laws were up for review in 1984, Sen.
Strom Thurmond, the infamous southern segregationist, snuck in an amendment that barred Puerto Rico from being eligible for Chapter 9 bankruptcy, without giving any rationale for the move.He went on to remind Puerto Ricans that this debt needed to be paid back to Wall Street, and blamed local officials for the poor response to the island’s humanitarian crisis.Looking at the long-term history of Puerto Rico’s debt and what caused it reveals that the federal government in fact shoulders much of the blame for the crisis.Puerto Rico has little say in how it is governed from Washington, and its citizens have almost no voice in federal policies that affect them.When America’s eyes turned to Puerto Rico after the island was devastated by Hurricane Maria last month, President Donald Trump was quick to condemn the “massive debt” the island was dealing with, even while the US territory was still in the throes of the storm’s aftermath.As a US territory, Puerto Rico has only one, non-voting congressman in the House of Representatives, and although they are technically citizens, Puerto Ricans cannot vote in presidential elections.