The origins and consequences of Puerto Rico’s debt crisis are eerily similar to those of Greece’s debt crisis, according to a Washington Post editorial. In both cases, a semi-sovereign, economically uncompetitive entity finds itself mired in slow growth but enmeshed in a currency union with a far larger and stronger neighbor. Both places have been enabled to live beyond their means by years of artificially easy credit — in Puerto Rico’s case, due to U.S. laws making its bonds “triple tax-free.” But, at last, the inevitable day of reckoning has arrived, and as the best and brightest young people cross open borders in search of opportunity, poverty is deepening and policymakers are belatedly waking up to financial reality.
