This Monday, Puerto Rico defaulted on a $422 Million dollar debt payment, a significant development as the island faces an impending economic crisis. As stated by Heather Long in CNN Money, “Puerto Rico, a tropical paradise in economic purgatory, faces a $70 billion debt bill it knows it cannot pay, a staggering 45% poverty rate and a shrinking population as citizens flee to the mainland.” This quote shows what kind of state the island is currently in and its outlook for the future does not look any better. Governor Alejandro Garcia Padilla says that they are facing a “humanitarian crisis”, and he claims that he is prioritizing the basic needs of his people over what the territory owes to banks.
Congress in the United States is currently working out a relief package for Puerto Rico that will most likely include some type of oversight board. The insistence of a oversight committee is due to a history of financial mismanagement in the Puerto Rican government. Congress will try and put together a plan as soon as possible, as the crisis is greatly hurting the islands 3.5 million US citizens along with the businesses located on the island. A recent population shrinkage has also negatively affected Puerto Rico as many of its most talented professionals are making their way to the mainland, leaving a hole in the economy of high skilled professionals, such as doctors. This exodus of residents hits the island's tax base hard, as less money is being made and spent in the territory, creating a tax burden for those that remain. The hope among those on the island is that a debt relief program can be implemented by Congress, along with proper governmental reforms, so that Puerto Rico can begin to climb out of its current crisis.