Finally! After months, US lawmakers have compromised to take a more rational approach to solving Puerto Ricos debt crisis. House Speaker Paul Ryan directed financial committees to take a common sense approach to preventing Puerto Rico from defaulting on January (or May) debt payments.
One approach will be allowing Puerto Ricans to qualify for the Earned Income Tax Credit currently available to citizens living in the States. This is a step in the right direction. Congress may not be able to legally allow the Island to default but they can even the laying field for its residents. Medicaid is another area where the government can help alleviate financial pressure.
Puerto Rico's position has not changed although policiticians are becoming more anxious that default is inevitable. There is no question about it. Puerto Rico will default. The impact on the people of the Island will be a directly proportional to the governments ability to toe the line of default to maximize negotiations between the municipalities and debt holders.
Rising interest rates should also throw a wrench into the equation. Let's see what happens.
Palmas Del Mar (October 2014)
