Puerto Rico Needs to Make Tough Choices
(Washington, D.C.) – With the start of the new year, the government of Puerto Rico has defaulted on $37 million of its debt due, while completing payment of a general-obligation debt of almost $1 billion. While many are looking to Congress to allow the Island to exercise bankruptcy under U.S. laws, this alone can lead to many repercussions and leave other contributing aspects to the crisis without solution. Congress continues to debate options, as members from both sides have offered alternative solutions. However, it isunsure if legislation for a stay or allowing bankruptcy for the territory will be considered in the House or Senate.
Daniel Garza, Executive Director of The LIBRE Initiative released the following statement:
“Puerto Rico’s financial crisis is largely due to a combination of cronyism, reckless government spending, and harmful federal policies. Any quick fix, including federal bailouts, will not solve the underlying problem. It needs to be addressed at the root, starting with the Puerto Rican government making tough choices – even at the risk of political repercussions.
Various options have been set forth to address the crisis, and Congress must consider this question carefully – including moral hazard and the precedent that may be set. The U.S. territory can rise above its financial crisis, but it will come through careful consideration, tough economic choices, and a willingness to work with the federal government to address its economic challenges.”