Trouble in Paradise: Debt Crisis in Puerto Rico
Puerto Rico is in a debt of $400 million and another $1.3 billion bond payment is due on July 1st but unfortunately the Island’s administration has declared that they can’t pay the debt. Two of the biggest reasons the government of Puerto Rico can’t make its payment is because the workers are leaving the island and the government spent more money than it takes in from taxes. Without workers the Puerto Rican government won’t have as much money as they need. The Puerto Rican government needs money for things such as firefighters, police, teachers, and paving the streets. The only solution seems to be cutting off services meaning the police, hospitals, education, prison systems, social services.
The United States gave Puerto Rico tax breaks but by 2006 they said no more tax breaks. After that the population started declining and less people started paying their taxes. Less money meant that Puerto Rico had to cut back on the public services. There is a 13.5% unemployment currently. Also, Puerto Rico’s prison system can no longer pay the vendor that is supplying food to the inmates.