Editorial Board

Loosen Uncle Sam's Grip on Puerto Rico

The U.S. didn't force Puerto Rico to amass a debt burden of $70 billion, but it could now help ease the island's burden by letting up on federal policies that have backfired there.

The U.S. government didn't force Puerto Rico to run big deficits for decades and to amass a debt burden of $70 billion -- more than any state but California and New York. That debt is the main reason all three of the big ratings companies have recently downgraded the island's credit rating to junk status.

Yet since making Puerto Rico a territory in 1898, Uncle Sam hasn't always recognized that economic policies suited to a high-income country won't necessarily work in a territory that has much in common with its less well-off Caribbean neighbors. Puerto Rico's 3.6 million inhabitants still endure greater poverty and unemployment than people in any U.S. state. For their sake, and to help the island's new government fix its finances, the U.S. needs to ease the burden of federal policies that have clearly backfired.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.