September, 29 2017, 01:30pm EDT
Federal Government Must Do Everything in Its Power to Help Puerto Rico Recover, CEPR Co-Director Says
Relief Measures Should Include Stimulus Package, Debt Relief, Medicaid Funding, Permanently Lifting the Jones Act.
WASHINGTON
The federal government must enact a series of urgent measures to assist Puerto Rico as it struggles to recover from hurricanes Maria and Irma, Center for Economic and Policy Research Co-Director Mark Weisbrot said today. These should include: debt relief; a significant fiscal stimulus package to fund the recovery efforts and jump-start the austerity-ravaged economy; allowing Puerto Rico the same Medicaid funding as US states and the permanent abolition of the Jones Act, which would allow non-US aid vessels to dock in Puerto Rican ports.
"The US government's response to the crisis affecting millions of its own citizens in Puerto Rico has been much too slow, and lacking," Weisbrot said. "Puerto Rico's vulnerability to such a disaster is the result of putting bondholder interests over those of Puerto Ricans -- now, urgent debt relief is necessary to allow for the rebuilding of the island's infrastructure and to stimulate growth."
"Funding for Medicaid that so many people in Puerto Rico depend on should be immediately extended to match what other states receive," Lara Merling, CEPR Research Assistant and coauthor of a recent paper on Puerto Rico's economy, added. "Especially in the aftermath of the storm, it is essential for people to have access to medical services."
The hurricanes have quickened Puerto Rico's economic downturn, which has already cost the island a lost decade, with no economic growth. The US government should support a new economic plan to assist Puerto Rico's economic recovery in the long-term, Weisbrot proposed. This would include:
- At a minimum, significant debt relief to prevent Puerto Rico's unsustainable debt burden from further hampering the island's economic recovery;
- Replacing the austerity policies promoted by the PROMESA fiscal oversight board by a robust fiscal stimulus, much of which could go to reconstruction;
- The permanent repeal of the Jones Act, which would help to alleviate poverty by lowering prices for food and other necessities;
- Allowing Puerto Rico the same federal Medicaid funding as US states, which would save Puerto Rico hundreds of millions of dollars annually.
"Puerto Rico's unusual status as a US territory -- not a US state, or an independent country -- greatly hinders the macroeconomic policy options at its disposal," CEPR Research Associate Jake Johnston said. "Washington must abandon its austerity agenda and support the removal of all manmade obstacles to Puerto Rico's recovery and reconstruction."
The Center for Economic and Policy Research (CEPR) was established in 1999 to promote democratic debate on the most important economic and social issues that affect people's lives. In order for citizens to effectively exercise their voices in a democracy, they should be informed about the problems and choices that they face. CEPR is committed to presenting issues in an accurate and understandable manner, so that the public is better prepared to choose among the various policy options.
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