Relief for Puerto Rico Now! Abolish the Debt!

In the aftermath of Hurricane Maria, which hit with winds of more than 150 mph, Puerto Rico remains devastated. Millions are without power and many have been left homeless — without medicine, medical assistance, food, or clean water. It’s a humanitarian crisis that has deepened by the day.

When Hurricane Maria made landfall in Puerto Rico on September 20, the whole transportation and communication infrastructure went down — including the power grid, bridges, roads, cell towers — devastating the entire island. Most people are still without basic necessities over a month later. Emergency logistics have been dysfunctional, and telephone service barely exists.

The early death toll was 48, but National Public Radio has reported an additional 49 deaths since the storm, and Puerto Rico’s Center for Investigative Reporting found that 69 hospitals had morgues at “capacity.” As more isolated towns and villages are reached, the death toll will surely climb.

Government officials in Puerto Rico have pleaded for more assistance, and as the crisis has grown more desperate, criticism of President Trump and the federal government’s response has mounted. Moody’s estimates that rebuilding will cost between $45 billion and $95 billion. The fiscal control board has released $1 billion for hurricane relief. According to Gov. Ricardo Rossello, only $2 billion is left in the Treasury Department’s account. The government  that it may run out of money by the end of the month.

Ever since Hurricane Maria and Irma devastated Puerto Rico a looming question has been what will happen to the island’s $74.8 billion in debt,which had crippled its economy prior to the storms. Protesters in major U.S. cities on October 3 called for the U.S. government to forgive the debt. Indeed, most  say repayment is unrealistic now that the island has suffered an estimated billions in hurricane damage. The Labor Fightback Network strongly believes that the island’s debt must be wiped clean immediately as a first step in helping to rebuild the Island for the Puerto Rican people.

Understanding Puerto Rico’s History

The situation in Puerto Rico today cannot be understood without understanding its history. Puerto Rico has been a colony of the United States since the Spanish-American War of 1898.

Puerto Rico was legally defined as an “unincorporated territory,” a possession but not part of the United States, and under the plenary powers of Congress. Although Congress has reorganized the territorial government over the years, up to the 1952 creation of the present Commonwealth status, the colonial nature of the relationship has remained unchanged. Puerto Ricans elect their governor and legislature, but they only attend to insular matters.

Having retained its primary powers over Puerto Rico, we might expect that Congress would assume its responsibility for a territory it claims as a possession. Yet it has skirted that responsibility in acquiescence to the profiteering by U.S. corporations, which has plagued the history of the island. After 1898, Puerto Rico’s economy came under the control of U.S. corporations. Puerto Rico then specialized in producing only a few goods for the U.S. market. One consequence has been the constant outflow of a significant portion of the income generated in Puerto Rico. At present, around $35 billion leave annually. This is around 35 percent of Puerto Rico’s gross domestic product. The result has been an economic exploitation and resource drainage which had already created a crisis-before the storms even hit.

When Puerto Rico declared a form of bankruptcy recently, it was the largest municipal bankruptcy debt in U.S. history. Puerto Rico’s more than $74.8 billion in debt and $49 billion in pension system obligations surpasses Detroit, Michigan’s $18 billion bankruptcy in 2013. Much of that debt is interest. Financial firms such as Goldman Sachs and Citigroup structured the bond loans Puerto Rico has needed with built-in and astronomically high interest rates. Nearly half the debt —$33.5 billion — is interest, and another $1.6 billion comes from fees paid to these firms. As a result, Puerto Rico has been forced to endure austerity measures approved last spring by a U.S.-appointed fiscal control board, including school closures and utility bill hikes. In August, the control board proposed even more draconian measures, such as massive furloughs. This must stop now!

Given the history and present circumstances, the Labor Fightback Network believes that the full rebuilding costs estimated at between $45 billion and $95 billion should immediately be allocated and passed by the U.S. Congress. The LFN calls for abolishing the Wall Street/Hedge Fund–created debt, ending the austerity and privatization/deregulation schemes of the Financial Control Board, and creating clean energy systems.

The Labor Fightback Network believes that only through a concentrated plan of the labor movement to organize, mobilize, and educate on the importance of solidarity with the people Puerto Rico can this crisis be resolved.

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About elnwebmaster

This is the discussion blog of the Labor Fightback Network, an auxiliary to the laborfightback.org website. It is designed to facilitate discussion among labor activists concerning the critical issues facing working people in the current economic crisis. Readers’ comments are welcome, but flaming is not. Any comments which are racist, sexist/homophobic, or disrespectful on a personal level will not get past moderation.
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