Money Can’t Solve Everything: A Puerto Rican Intervention

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There are some valid reasons for the United States to intervene and pay off Puerto Rican debt. If the debt continues, local schools, hospitals, and emergency responders may have to close, which would lead to a severe drop in the quality of life of Puerto Ricans. Additionally, this will lead to an influx of migrants headed to the United States. More likely than not, these people would come to close territories like South Florida and drastically shift the labor market there. This could lead to higher unemployment rates. Higher unemployment rates would lead to more government spending on welfare aid for these people. As Schrager states3, “the sooner the federal government acts, the lower the cost to taxpayers because the financial hole will only get bigger.”

Conversely, there are also many issues with immediately coming to the aid of localities, like Detroit or Puerto Rico. Simply giving money to the entity in trouble does not fix the underlying issues that got them into this issue in the first place. Moreover, there have been proposals by Democratic leaders in the Senate to allow Puerto Rican officials to restructure their debt and pay it back according the the Governor’s wishes. Republican McClintock argues4 that if the United States rewrote the rules for Puerto Rico, then they have a responsibility to do that for all states. He goes on the state that doing this would sink a state like California.

Overall, the best policy measure would be United States’ officials helping to restructure how the Puerto Rican government are managing their debt financing versus solely bailing them out. Simply providing them with billions of dollars would just place a Band-Aid on top of deep wound. The issue is bound to resurface again in another decade or two. Lastly, there needs to be some level of aid or else the island will be abandoned soon. If the United States hopes to get a return on their investment of controlling Puerto Rico, they need to improve the status of the territory before it becomes deserted.