[Flashback 2015] Puerto Rico's 'death spiral' can be traced back to one mistake

[geronl]

Puerto Rico is $72 billion in debt, and it will take a painful process to bring the island's finances back from the brink.

It's a massive debt load for such a small territory, and the problem can really be traced to one issue — bad tax policy.

After Puerto Rico let one tax break for manufacturers expire almost a decade ago, manufacturers started shutting down operations on the island. That caused a spike in unemployment.

excerpt
http://www.businessinsider.com/how-puerto-rico-got-in-over-its-head-2015-8


In other words, they raised taxes on foreign manufacturers and the manufacturers left. Followed by about a million Puerto Ricans seeking greener pastures.

[geronl]

Here is the Wiki entry about the 2006 budget crisis that caused PR to eliminate the tax incentive.

https://en.wikipedia.org/wiki/2006_Puerto_Rico_budget_crisis