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Puerto Rico’s Financial Problems Could Impact Entire U.S.
(Washington D.C.) – In the wake of a report by the International Monetary Fund confirming the unsustainable public debt in the Commonwealth of Puerto Rico – a U.S. territory – the Governor has declared that that debt is «not payable.» He is calling for Puerto Rico’s creditors – who have loaned the island $72 billion, and who include many mutual funds and other U.S. investors – to negotiate with the island government. Millions of Americans who call Puerto Rico home face an extremely uncertain future as policymakers attempt to chart a course forward. Millions of mainland Americans, either directly or indirectly through their mutual funds, have bought Puerto Rican bonds, and will also be affected by these decisions.
Jorge Lima, Policy Director for The LIBRE Initiative released, the following statement:
«Puerto Rico is an example of how big government spending, higher taxes, and growing government dependency have driven the economy into a hole. As we are seeing with the government of Greece, no solution will provide anything more than temporary relief if they do not to address the issues at the root — overspending, corruption, and poor management of government aid and subsidies. These irresponsible government policies can’t be ignored as leaders in Puerto Rico and Washington debate a range of options going forward.»