Monday, February 27, 2017

Joseph Stiglitz, the Nobel Laureate, on Saving Puerto Rico

To the Editor:
Your Feb. 21 editorial “To Save Greece, Save Its Economy” was on target in criticizing proposals by European officials that require Greece to sustain a primary surplus of 3.5 percent of gross domestic product, a sure recipe for continuing the depression that has afflicted Greece since 2010.
Closer to home, though, the board appointed to oversee Puerto Rico’s debt restructuring is demanding something even worse: It actually predicted that its proposals would turn the island’s recession into a depression, of a magnitude seldom seen around the world — a decline of 16.2 percent of gross national product in the next fiscal year, comparable to the experience of countries in civil wars, and Venezuela in economic crisis in 2016. Unemployment, already at 12.4 percent, would soar.
The plan, which puts the creditors’ interests above those of the island’s economy and people, will create a debt spiral. As in Greece, the debt/gross domestic product ratio will rise, and with it the likelihood of ever-deeper debt write-downs. American taxpayers will lose, too, as they will pay for the costs of increased migration to the mainland.
One of the untold costs of the Trump era is that vital issues such as this are getting no attention.
JOSEPH STIGLITZ
New York
The writer, a Nobel economics laureate and a Columbia University professor, is a former chairman of the Council of Economic Advisers and a former chief economist at the World Bank. He is a member of the Growth Commission of the Center for a New Economy, a Puerto Rico nonpartisan N.G.O.

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