Puerto Rican government-debt crisis

The Puerto Rican debt crisis is an ongoing financial crisis related to the amount of debt owed by the government of Puerto Rico. The island has more than $70 billion USD of outstanding debt, with a debt-to-GDP ratio of about 68%. In February 2014, various American credit rating agencies downgraded the government's debt to non-investment grade.

The crisis has caused Puerto Rico's government to adopt policies that will ideally reduce costs drastically, increase revenues, and spark economic growth so that it can better fund its debt obligations. Puerto Rico's economy has been described as precarious, weak, and fragile, and aggravated by social distrust and unpleasantness.

On August 3, 2015, Puerto Rico defaulted on a $58 million bond payment to the Public Financing Corporation, a subsidiary of the Government Development Bank, while other financial obligations were met.

In early 2017, the bond debt was again posing serious problems for the government; it was at $70 billion or $12,000 per capita at a time with 12.4% unemployment. By mid January, the cash strapped government was having difficulty maintaining health care funding. In late January, the federal control board set up under PROMESA gave the government until February 28 to present a fiscal plan (including negotiations with creditors) to solve the problems. A moratorium on lawsuits by debtors was extended to May 31.

In the beginning of the 16th century, the Spaniards colonized Puerto Rico. In 1898, Puerto Rico was ceded to the United States, at the end of the Spanish–American War. Prior to that, the people of Puerto Rico had Spanish citizenship; after Puerto Rico was no longer part of Spain, the people of Puerto Rico effectively lacked citizenship from a sovereign country after it was ceded: the people of Puerto Rico were neither Puerto Rican citizens, nor American citizens, nor Spanish citizens. Because of this, on April 12, 1900, the U.S. Congress enacted the Foraker Act, establishing Puerto Rican citizenship for people born in Puerto Rico.

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