Congressman: Puerto Rico is the canary in the U.S. debt mine
What happens when a government is so far in debt it borrows to pay interest on its debt only to find it needs more layers on its debt pyramid to remain solvent?
If you are the U.S. government, you crank up the printing press. If you are like my home state of Arkansas that found itself in financial disarray and defaulted on its bonds in 1933, you take your lumps, get a poor credit rating, restructure with caveats like a balanced budget requirement, and methodically climb your way out to rebuild your economy.
It was not pretty, and Arkansas issued no new bonds until 1949. But if you are Puerto Rico, you anxiously wait to see if the United States will promulgate your welfare state by looking past your poor management, and feed your debt addiction with a taxpayer bailout. I believe Congress must exercise tough love, and compel Puerto Rico to responsibly get back on its feet.