Seeds: Puerto Rico, the quasi-independent American commonwealth that we can thank for the likes of J-Lo and Ricky Martin, is in trouble. The roots of this trouble can be traced back to 2006, when Congress terminated the tax breaks that brought business to the island. The end of these tax breaks drove corporations out and ushered in a recession. In order to combat this recession, the Puerto Rican government brought in investors to help fund the economy. Since the island is not a state, the money invested was tax free for the investors, by giving the wealthy a place to put their money without it being taxed, making the investment extremely advantageous. In reality, the investments did not help to fix the economy, and 10 years later Puerto Rico is still in a recession with $72 billion worth of debt.
Core: This week, Congress will vote on a bill that should help Puerto Rico restructure their debt. Essentially, the bill is a measure to ensure that the Puerto Rican economy does not go completely south, causing what some would call a “humanitarian crisis.” However, the extreme effects of the debt crisis can already be seen. For example, earlier this year a Puerto Rican power company cut off the electricity to a local hospital that was $4 million dollars in debt.
Skin: Although this issue has not gotten nearly as much coverage as one would expect, it has gotten a recent boost in the news media thanks to the Hamilton playwright Lin-Manuel Miranda. A son of Puerto Rican immigrant parents, Miranda wrote an op-ed piece for The New York Times and pleaded in front of members of Congress for their help and support. He even appeared as a guest on John Oliver’s Last Week Tonight to perform a rap about the debt crisis.
Leaves: Although Puerto Rico’s uncertain fate seems distant from the average American citizen, the effects of the debt crisis could potentially affect those who live in the continental US. Not only will this most likely become a contentious topic in upcoming presidential debates, but also if Puerto Rico is unable to repay its debts, the lost money of investors could ripple throughout the American economy.
Food For Thought: Do you think the federal government should help Puerto Rico? Why do you think the media has not paid much attention to the debt crisis?