Puerto Rico Economy: Island Following in Greece’s Footsteps, Will the U.S. Come to Its Aid?

First it was Greece, now it's Puerto Rico.

In a report by Bloomberg Business, Puerto Rico has $70 billion in debt and a shrinking economy, and is on the fast track to following in Greece's footsteps. The US territory is said to be running low on cash to operate their governments, as well as being on the verge of defaulting on bond payments.

The government is also on the fast track to closing schools and cutting back workers, which is one of the reasons why many of its residence are leaving for the mainland US in what seems to be the fastest pace in the last decade. According to Bloomberg, the island's population is actually shrinking, as a net of 1,200 people per week have been leaving in the past year.

Governor Alejandro Garcia Padilla has already called for a congressional action as the government tries to restructure its debt with bond holders and he's already gaining support from US politicians, including New York Governor Andrew Cuomo and New York City Mayor Bill De Blasio, who said about the crisis, "One of the strongest comparisons is to the bailout of 2008. The banks were in trouble. The federal government moved heaven and earth to address that crisis. Here are 3.5 million people in crisis. We should move heaven and earth to get them the help they need."

But will the rest of the states be equally supportive of their plight?

As noted by Fox News, Puerto Rico is not a state, which means that it cannot utilize Chapter 9 of Bankruptcy protections. Also, not being a foreign nation, the US Treasury or the International Monetary Fund cannot assist emergency loans to restructure the debts, either.

Arizona Senator Catherine Miranda says that this is a case of Congressional mismanagement of its territories, calling the United States' failure to help a "benign neglect" that can fall on nations with no significant political influence.

However, Bloomberg did note that US lawmakers may hold hearings before the holidays on the proposed assistance package made by the Obama administration, which includes increase in Medicaid reimbursements and bankruptcy protections, but officials on the island are adamant that they can no longer wait for help to come. Melba Acosta, president of the Government Development Bank said, "We are fast approaching a catastrophe."

Do you think that it is necessary for the United States to help Puerto Rico get out in the current state, or is it the island's duty to pay its own debts even as its economy is falling?