Commentary: The President has been loudly shamed for his personal response to the devastation of Puerto Rico, from the egotistical Twitter attacks against local officials, to half-jokes about the expense of recovery and the budget, to flipping paper towels atsurvivorslike they were dogs; and yet, one day in the midst of this, he made a daring and uncharacteristically humane suggestion: cancelling Puerto Rico’s debt.
In an interview on the Fox network, the President said: “They owe a lot of money to your friends on Wall Street and we're going to have to wipe that out.” Granted, the President cannot unilaterally restructure Puerto Rico’s debt or enact jubilee by fiat, and on Wednesday the White House budget director was busy walking back the comment; yet for a moment, Donald Trump lent what meager moral capital he possessed to a worthy cause. Puerto Rico’s debt is odious and it should be cancelled.
As has been pointed out elsewhere, the origins of “odious debt” as a legal doctrine involve Puerto Rico. After the Spanish-American War, the United States took possession of the island along with Cuba, the Philippines, and other territory; yet we refused to assume Spanish debt, arguing that the borrowing was not beneficial, indeed hostile, to the populace. This precedent established a legal means to cancel some or all debt that strangles the welfare of a people.
So it is with Puerto Rico, languishing in colonial subjugation ever since, without representation or sovereignty, whose elected leadership can be overruled by an oppressive fiscal review board authorized by President Obama, a federal viceroy squeezing our colony with austerity policies that lock its economy in a death spiral. Under this odious regime, Puerto Rico pays more to service debts to Wall Street than is permitted for public health, education, economic development – or hurricane preparedness. The U.S. posture has been that it is fine for people to suffer, leave, or die, and for public services to be sold off to private investors, rather than expose vulture funds to the consequences of risky investment.
Before being hit by two hurricanes in September, Puerto Rico’s unemployment rate was over 11 percent, with 46 percent of her people living in poverty and 58 percent of her children. There has been no economic growth since the 2000s, but as an “unincorporated territory” of the United States, Puerto Rico cannot forge an economic strategy or default on debt. The 1920 shipping law known as the Jones Act inflates prices for food, fuel, and other goods. The Federal Reserve Bank of New York has estimated that shipping costs from our east coast to Puerto Rico double the costs of shipping to the Dominican Republic. Internal political failures notwithstanding, this island has been oppressed by forces outside its control, wrought by a patron more concerned with extracting wealth than for the welfare of its people.
This, again, was the state of affairs before the disaster of Hurricane Maria. Now, millions of people are without food, clean drinking water, or electricity. Half of the island’s hospitals are functional, powered by generators, but the lack of electricity is stoking a public health crisis. Governor Ricardo A. Rosselló believes the hurricane caused $90 billion in damage.
For now, the immediate need is the best disaster relief a $700 billion military force can muster, to be followed by Wall Street writing off most or all of this odious $74 billion-dollar debt, and a new political relationship granting Puerto Rico a status above the economic occupation that has choked her people.
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Algernon D’Ammassa writes the “Desert Sage” column for the Deming Headlight and Sun News papers. Share your thoughts atadammassa@demingheadlight.com.