The Caribbean is known for blue water, white beaches – and red ink. The region is home to seven of the world’s 10 most indebted nations.
But the Caribbean’s worst crisis involves a U.S. territory: Puerto Rico, whose debt is a staggering $73 billion.
That burden now threatens to financially sink the island of 3.5 million people – and that in turn promises to drive more migration into Florida. Puerto Ricans are the state’s fastest-growing Latino group, especially in the central I-4 Corridor.
So I spoke with former Miami Mayor and Puerto Rico native Maurice Ferré, who’s been watching this emergency closely.
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Excerpts of our conversation:
Seventy-three billion dollars. That’s three-quarters of Puerto Rico’s entire economy. Can you walk us through how a U.S. commonwealth accumulated that kind of catastrophic debt?
Poor judgment. Poor judgment by the last four or five governors borrowing money because they did not want to decrease the size of government. And of course these debt situations, you know, they snowball – and I think it’s just been a lack of leadership in Puerto Rico, unfortunately.
If you look at the credentials of all these people, they’re all graduates from Harvard and Yale, and they’ve had experience in government, and they’ve had all the training in the world. And yet the public utility, Puerto Rico’s electrical corporation, burns oil. Hello? That should have been changed 30 years ago. As a consequence, the cost per kilowatt-hour is almost twice what it is in Florida.
I mean, that’s just foolishness that’s gone on and on and on. So what’s happening is, Puerto Rico is rushing into insolvency. Insolvency means you don’t have any money left in the till.
Here in the U.S., a city like Detroit that’s drowning in debt can file for bankruptcy. Under U.S. law that’s not an option for a territory like Puerto Rico.
There are a million Puerto Ricans in the state of Florida right now. Everybody thinks they're all coming into Orlando, but they're coming into Miami, Fort Lauderdale, Palm Beach, all over. –Maurice Ferre
That’s a law written by Congress, and Congress can also change it. But in a Republican Congress that ain’t gonna happen.
But if we don’t let Puerto Rico file for bankruptcy, aren’t we then staring at the U.S. having to fork over a taxpayer bailout?
That’s exactly what’s going to happen, because it is Congress that didn’t step in and say, “Wait a moment, you guys aren’t being fiscally responsible.’”
What else can Washington do to avert disaster? Are there ways to make it easier for Puerto Rico to do more business with the U.S. mainland, for example?
You know, there was a referendum in 2012 in Puerto Rico. [Of] those that voted, 61 percent said, “We want statehood.” And now the people of Puerto Rico are saying, “OK, the solution is, give us statehood, and then when we have the equal rights of all U.S. citizens under statehood, our economy will begin to change, as [have] other economies that have gone through similar problems.”
What is your personal preference for Puerto Rico?
Oh, statehood. Statehood.
And this crisis will intensify that debate over whether Puerto Rico should be the 51st state. But in the meantime, since Puerto Ricans are U.S. citizens, we’re seeing massive migration out of Puerto Rico, and most of it today is coming to Florida.
In the last five years, 100,000 people have left Puerto Rico. It is estimated that by next year it will be 100,000 people a year. Puerto Rico produces a tremendous amount of college graduates every year – more than many states in the union in proportion to the population. The point being that they can’t get work in Puerto Rico.
There are 56,000 abandoned homes in Puerto Rico – where somebody goes to the mortgage company or the bank and says, “Tim, here are the keys to my car, here’s the key to the house. I’m leaving, I’m going to Orlando." There are more Puerto Ricans on the [U.S.] mainland now than there are in Puerto Rico. There are close to 6 million Puerto Ricans all over the United States.
There are a million Puerto Ricans in the state of Florida right now. And by the way, everybody thinks all these Puerto Ricans are coming into Orlando; they’re coming into Miami, Fort Lauderdale, Palm Beach, all over Florida. Tampa has a big Puerto Rican community.
And this exodus is really changing the political face of central Florida, at least.
Absolutely. Kissimmee, Florida, Osceola County. [In the past] the city commission, the county commission, [were] Republican. Now, they’re all Democrats. Why? Puerto Ricans.
Tim Padgett is WLRN's Americas editor. You can read more of his coverage here.
