“The debt is not payable. There is no other option. I would love to have an easier option. This is not politics, this is math.”
Puerto Rico’s governor, Alejandro García Padilla, said this to the New York Times in a shocking interview just last week where he revealed that the U.S. territory is so far into debt, it may have to default.
The island nation, which has a mere 3.6 million people living within its borders, is over $72 billion in debt at the moment, and it’s reliance on municipal bonds (which typically fund public projects like road construction and maintenance) has caused government spending to skyrocket.
The real problem is that Puerto Rico isn’t bringing in enough revenue to pay back its creditors, who happen to be sitting right on Wall Street.
According to a report from Business Insider, García Padilla had been planning on taking out additional credit worth $2.9 billion, until government officials requested an economic analysis of its financial state. When García Padilla saw the numbers, he realized that $2.9 billion would barely scratch the surface.
He explained to the Times that the government has already asked its citizens, who are “already struggling with high rates of poverty and crime, to shoulder most of the burden through tax increases and pension cuts.”
The issue, however, is that Puerto Rico’s population of 3.6 million is dwindling — CNN Money reports that Puerto Ricans from “all social classes” have begun emigrating in order to find jobs.
The immigration crisis in the U.S. is perhaps the most obvious example of what’s really happening on the island: between 1980 and 2000, CNN reports that the annual number of Puerto Rican migrants arriving in the U.S. was 12,000; between 2010 and 2013, that number grew to 48,000 people per year.
Add this number to the estimated 41 million immigrants who were living in the U.S. during 2012, and it’s easier to see why Conservatives are afraid of too many lost opportunities going to illegal immigrants, while Liberals argue that immigrants of all statuses in the U.S. suffer from a lack of basic rights.
There’s no guarantee that Puerto Rican migrants will be granted legal status upon arrival in the U.S., but thousands have taken that risk each year because the situation in Puerto Rico is even worse.
One thing is clear: as a U.S. territory and commonwealth nation, Puerto Rico cannot legally declare bankruptcy. And with so many taxpayers leaving the country, García Padilla’s job is far from easy right now.