Though the debt crisis in Greece is eating up most of the media oxygen, a somewhat similar crisis is happening in Puerto Rico. They’ve got way too much debt, and have been struggling badly since the 2008 financial crisis. The situation has reached a breaking point, and Governor Alejandro Padilla has flatly admitted the island colony cannot pay in full. Though it is an unlikely prospect, this is an area where the United States government can do some good. By proposing a referendum on statehood, and assisting with an orderly debt write-down, America can atone for past sins and put Puerto Rico back on an upward trajectory. The roots of the crisis are explained well in a piece by Matt Yglesias. For a number of years Puerto Rico had some odd tax advantages that allowed it to borrow extremely cheaply, and so it did, running up a debt vastly larger than any other American state. In 2006 the tax advantages were finally phased out, which made it particularly badly positioned to deal with the financial crisis only two years later. Now with the economy in deep trouble, the government is running short of cash, its citizens are emigrating for the mainland, and it will basically have to default.Full Article: Want to save Puerto Rico? Make it a U.S. state..
Jul 3 2015