Puerto Rico’s Economic Debacle: Correctly Blame Washington
J.Tomas Hexner and
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J.Tomas Hexner: Founder and director, Science Initiative Group at the Institute for Advanced Study at Princeton, New Jersey
Arthur MacEwan: University of Massachusetts Boston
No 2017-13, Development Discussion Papers from JDI Executive Programs
The dire economic situation has been widely recognized. As it has become apparent that the Puerto Rican government will not—indeed, cannot—meet its debt obligations, the situation has received considerable attention in the U.S. Congress and media. Most of the discussion explains the crisis as the result of irresponsible actions by the Puerto Rican government. While such irresponsible actions have certainly played an important role, ultimate responsibility for Puerto Rico’s economic decline lies in Washington. This federal government responsibility is formally stated in the U.S. Constitution, where territories are declared to be “property” of the United States and Congress has the authority to “make all needful Rules and Regulations” concerning territories. Moreover, the policies toward Puerto Rico established by the federal government have generated a dependence that has been at the root of the island’s economic debacle. While many people, politicians and economists in the states, believe that Puerto Rico has been treated “generously” by federal programs, this view is belied by the data.
Keywords: Puerto Rico bankruptcy; debt obligations; level playing field (search for similar items in EconPapers)
JEL-codes: O1 O2 Z32 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:qed:dpaper:310
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