As Puerto Rico inches closer to defaulting on its more than $70 billion debt, Congress drags it feet on providing relief. So on Sunday’s episode of Last Week Tonight, John Oliver took on the crisis by looking at the legal loopholes that got Puerto Rico into this situation. Things like doing away with the Sec. 936 tax breaks, which exempted companies from paying taxes on income earned on the island, to not allowing Puerto Rico to authorize Chapter 9 bankruptcy – something that happened out of nowhere in the 1980s – have all contributed to the economic crisis.
Between completely phasing out the tax breaks in 2006 and the United States recession, Puerto Rico lost half of its manufacturing jobs. And the government began to pay its bill through municipal bonds, which basically amount to IOUs. Congress made purchasing these bonds extra lucrative by making them triple tax exempt – meaning the profits couldn’t be taxed at the federal, state, or local level. And the Puerto Rican constitution also suggests that some bondholders will receive their money ahead of basic government services.
“Which is pretty fucked up,” Oliver said. “The U.S. owes $1.2 trillion to China, but if you called 911, you would not expect them to say, ‘Oh, I’m sorry. We chose to send off our fire truck money to Beijing. Have you tried blowing on the fire really hard?’”
For nearly 20 minutes, Oliver unraveled the tangled web that is Puerto Rico’s economy. And to further drive the point home, Oliver invited Lin-Manuel Miranda to close out the show with a rap. Miranda, who asked Congress for help in March and penned a deeply personal op-ed about the crisis that same month, took to his Twitter account to encourage people to forward Oliver’s video to their representatives.
Check out the full video above to get a better understanding of the debt crisis and Miranda’s praise of Oliver: