ƒTo tourists, Puerto Rico means piña coladas and sunbathing. To Puerto Ricans, it looks very different: The unemployment rate is over 12 percent, schools and hospitals are closing, and the government debt is so huge it makes Detroit’s look modest.
Puerto Rico is now supposed to pay an unfathomable $2 billion to bondholders on July 1 – which it cannot do – even as it accrues pension obligations to its workers and lets public works lapse. A relief bill is expected to be introduced in Congress on Wednesday, but even if it passes and works, the island will not be able to pull out of its financial tailspin for years.
But mainland residents should not look smugly at Puerto Rico. Across America, dozens of cities, counties and states may be heading down the same financial rabbit hole. Illinois, New Jersey, Philadelphia, St. Louis and Jacksonville, Fla., to name just a few, are all facing their own slowly unspooling financial disasters.
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