The expanding debt crisis in Puerto Rico has now reached a tipping point where federal action will be required to avert a catastrophe. Some in Congress have already indicated that they will under no circumstances support any form of bankruptcy (Chapter 9) status for the island. They should reconsider.
Policymakers don’t have the luxury of making their decisions based on abstract philosophical principles. The choice here is stark. It’s order vs. chaos. And chaos is bad for everybody, on the mainland and on the island.
Chaos will lead to a mass migration from Puerto Rico to Florida and other states. Chaos will lead to a meltdown in the stock market, not unlike what happened to the European Union when Greece faced its credit problems.
And chaos will lead to a breakdown of public health on Puerto Rico, which inevitably will spill out through America. We have already seen evidence of it with the Zika virus.
There is no quick fix for the dilemma that Puerto Rico faces. The government does not have the cash to service its debt; it will begin defaulting in the coming weeks. Even some of the island’s creditors are willing to concede that it would be counterproductive for Puerto Rico to take the draconian measures needed to service all of its debt. (Read More)
See the compete original article at: http://www.investors.com/politics/viewpoint/congress-should-favor-order-over-chaos-in-puerto-rico/