FACT CHECK: Does Puerto Rico Have ‘Billions’ In Debt?
President Donald Trump claimed that Puerto Rico is suffering from “massive debt” with “billions of dollars owed to Wall Street.”
Hurricanes Irma and Maria devastated the U.S. territory earlier this month, completely wiping out the island’s power grid.
Verdict: True
With billions in debt, Puerto Rico is in the midst of a debt crisis.
Fact Check:
Puerto Rico has public debts exceeding $72 billion dollars as of 2015, according to the Mercatus Center. This figure includes debts incurred by Puerto Rico’s public corporations, local municipalities, and Puerto Rico’s central territorial government.
Puerto Rico’s public debt bill comes out to about $20,000 per resident of the island territory, the highest of any other U.S. state or territory.
Puerto Rico’s astonishing nominal debt level, moreover, stands in the face of its relatively small economy.
The island territory’s Gross Domestic Product (GDP), a statistic that estimates the size of an economy, was $101.57 billion in 2015. Puerto Rico’s 2015 debt-to-GDP ratio thus works out to over 71 percent.
In comparison, New York’s total debt-to-GDP ratio in 2015 was just 24.04 percent, which was the worst of any U.S. state that year.
Puerto Rico’s debt pile has been mounting for decades now. The territorial government defaulted on most of a $422 million debt payment last May and has sought the services of leading bankruptcy and restructuring advisors. (U.S. states and territories cannot file for bankruptcy.)
Trump’s Twitter claim that Puerto Rico has “billions” in debt holds up to the facts.
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