The United States consists of 50 states, five territories, and one district. In the territory of Puerto Rico, the majority of residents are not required to pay federal income tax. Considering this, a heated debate has arisen in regards to how we can assist Puerto Rico in their climb out of their enormous national debt.
A $422 million debt payment was already missed this week. On top of that, Puerto Rico owes another $1.9 billion by July 1. Puerto Rico’s governor, Alejandro Garcia Padilla, insists that Congress must restructure the debt, or his country will require a bailout.
“If Congress acts today, it will cost $0 to U.S. taxpayers. If Congress does not act, then we will need a bailout,” Padilla said in an interview with CNBC’s “Power Lunch.” “It will be very expensive to U.S. taxpayers.”
With a 45 percent poverty rate, the territory remains $72 billion in debt. A congressional committee is in the process of discussing a fiscal restructuring deal.
“It’s not an issue of politics. It’s not even an issue of policy. It’s a mathematical issue. We do not have the money. It’s as simple as that,” Padilla said.
Image courtesy of Robert L. Lang