Puerto Rico and the United States share a currency. So when the island has an economic cough, the entire country catches the cold.
And out of all U.S. territories, Puerto Rico owes more money to creditors per resident that anywhere else. About $20,000 is owed for every one of its 3.4 million residents, totaling about $70 billion in debt.
Hence, the Puerto Rico debt crisis.
But states and commonwealths can’t default on their debt like a city can (see also: Detroit), meaning the U.S. government could have to bail out Puerto Rico to the tune of billions of dollars if they can’t pay up.
Now, the government is looking for ways to solve the crisis.
Leaders have just proposed a balanced budget for the first time in decades, and the island is also searching for ways to fix the crisis through a new website where average citizens can submit ideas. So far, they have agreed to consider legalizing marijuana and prostitution, along with some other suggestions that have been submitted.
But if these don’t help get the finances on track, our tax dollars could be the billion-dollar parachute that saves Puerto Rico as it goes over the edge.