Happy Dog Takes on the World: Puerto Rico Debt Crisis.
On Tuesday night we went to the Happy Dog at 58th and Detroit Avenue for the monthly, "Happy Dog Takes on the World" installment and this month the subject was the Puerto Rico Debt Crisis.
Besides the Happy Dog, this program was "presented in collaboration" with the City Club of Cleveland, Cleveland Council on World Affairs, International Partners in Mission, Northeast Ohio Consortium for Middle East Studies, and ideastream.
The program was moderated by WCPN host/producer Tony Ganzer and the three panelists were Mr. Juan Molina Crespo, Executive Director of the Hispanic Alliance; Mr. T. Daniel Reynolds, Business Restructuring and Reorganization Associate from Jones Day; Dr. Jose O. Sola, Ph.D, Associate Professor of History at Cleveland State University.
Basically, what we got from it is that there is plenty of blame to go around for the $72 billion debt crisis that Puerto Rico now faces. Among the factors most cited were Puerto Rico's unusual relationship with the U.S. that appears to be going nowhere at this time in terms of statehood or sovereignty; the phasing starting in 1996 of Section 936 of the tax code which gave U.S. companies a break on income generating from U.S. territories; and an inept government that borrowed too much. At any rate, we know that between 1976 and 1996 Puerto Rico was a mecca for the manufacturing and the pharmaceutical but after 2006 everything seemed to fall apart and the companies left as well as 2% of its populace (U.S. citizens due to the Jones Act of 1917) many of whom moved to Florida.
Meanwhile on the island, services have been on the rapid decline. Schools are closing, hospitals are closing some of their floors, and the police can't get enough gas to keep their tanks full.
Since, unlike Detroit and other U.S. municipalities, Puerto Rico cannot declare bankruptcy, U.S. House Speaker Paul Ryan is trying to muster support for a bill that would "restructure" Puerto Rico's debt. Included in the legislation are provisions for a federal oversight board to watch over the debt re-structuring agreements and monitor the local budgets.
The federal oversight board figured a lot in the evening's discussion. Basic agreement was that something like it was inevitable but questions remain as to who its members will be and how much leeway will Puerto Ricans receive in terms of how much they will be able to spend on essential services vs. paying down the debt. Obviously major economic redevelopment is the thing most desired but what will have to happen to make this happen?
Mr. Reynolds, who focused on the economic aspects of what was happening, explained how the debt crisis of Puerto Rico affects all of us while Mr. Crespo and Dr. Sola addressed the historical and humanitarian aspects of the situation. All and all it was a very balanced discussion and "balanced" is the key term in all of this because, as all agreed, a balanced solution is the only way out of this quagmire.
Margaret W. Wong & Assoc. Co., LLC.