Puerto Rico is in Deep Fiscal Peril and President Obama Can and Must Take Action
Provided by Jesus of ThisFunktional.com
Puerto Rico faces its worst economic crisis in more than a century due to a $72 billion debt burden that is unpayable. If Puerto Rico is unable to restructure its debts, the island will descend into an economic crisis that will wipeout savings, pensions and compromise its economic viability for generations to come.
President Obama must act decisively to help the 3.5 million American citizens living in Puerto Rico.
We urge the President to call for a full federal agency review of policies that are economically harmful to Puerto Rico, including health care reimbursement, and convene his Working Group on Financial Markets to develop an in-depth debt relief, repayment, and investment plan to stabilize the island’s economy.
We call on the President to take action on Puerto Rico now.
FACTS ON PUERTO RICO
- Puerto Rico is $72 billion in debt. The debt has been declared as “unpayable” by financial experts
- Puerto Rico is now in default. This marks the first default in the island’s history
- The Puerto debt is as big as of the state of New York while its economy is 17 times smaller
- Nearly 3.5 million American citizens live in the island, yet the Federal Government has failed to meaningfully respond.
- More than 30,000 people have been laid off
- 1,000 Puerto Rican are leaving the island each month
- Poverty rate is 3x higher on than the U.S.
- Unemployment is 5 percentage points higher than any US state
- $25 billion of the $72 billion in debt is due to growing healthcare costs as 60% of the island is enrolled in Medicaid or Medicare
- Puerto Ricans pay the same amount of Medicare Taxes as U.S. Citizens, yet receive half the funding rate from the federal government
- The Jones Act forces all maritime traffic to the island to use U.S.-made vessels, which unreasonably costs the island billions. Its restrictions triple the cost of importing to and exporting from the island
- Congress needs to change the law to give the island Chapter 9 bankruptcy rights
- People in the island already pay two to three times what mainland U.S. residents pay for electricity, even though a far higher percentage of people are unemployed and living in poverty.
- Puerto Ricans already pay a higher sales tax than any U.S. state, rising from 7 percent to 11.5 percent this July.
- Hedge funds’ have bought up large chunks of Puerto Rican debt at discounts, and pushed the island to borrow more. Now they are advocating for massive teacher layoffs, pension cuts, and other quality-of-life reductions for Puerto Ricans as the ‘solution’ to the crisis in a self-serving attempt to enlarge their profits