Puerto Rico, the Fed and the Book of Leviticus

National Catholic Reporter

by Michael Sean Winters

Religious leaders in Puerto Rico, led by Archbishop Roberto Gonzalez of San Juan, have called for the Federal Reserve to interest itself in that island’s debt crisis in the absence of any prospect of Congress passing legislation that would address the issue. My colleague Joshua McElwee reported on the story yesterday, noting how rare it is that the island’s religious leaders, from the Pentecostals to the Evangelicals to the Methodists to the Catholic bishops, are all united on this – or any – issue. 

That unity is, in part, the result of desperation. For a variety of reasons, Puerto Rico’s economy is a shambles and the government debt cannot be serviced. Thousands of Puerto Ricans, especially members of the professional class, have fled to the States in search of opportunity. The manufacturing sector of the economy has been hit very hard. Governments of both political parties have kicked the deficit can down the road. Unemployment has soared and the last thing Puerto Rico needs is a round of austerity measures that would make life intolerable for hundreds of thousands of already poor Puerto Ricans.

For a variety of different reasons, the normal mechanisms used in such crises do not apply to Puerto Rico. It is not an independent country so it cannot appeal to the International Monetary Fund for help. It is not a city or a state, so it cannot access bankruptcy laws as Detroit recently did. Puerto Rico’s anomalous legal status as a U.S. possession leaves it without the kind of avenues for redress and assistance other political entities enjoy.

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