How will Puerto Rico's poor economy affect you?

Puerto Rico

Old San Juan, the center for Puerto Rican tourism, is viewed on November 12, 2013 in San Juan, Puerto Rico.

For the first time in more than a decade, lawmakers in Puerto Rico balanced their budget. And during the past ten years, the US territory has had a rough economic go: A major recession hampered state revenues, while a major crackdown on the drug trade along the U.S. border pushed much of the trafficking (and violence) into Puerto Rico. The combination of a lingering recession and an influx of drugs has led to the highest murder rate in the U.S. – almost six times higher than the national average.

It’s also led some analysts to call Puerto Rico “the New Detroit.”

That got us wondering if the balanced budget is an indicator of brighter days ahead for the Puerto Rico. And if you’re thinking at this point, “who cares about some small, tropical island?” we’ll ask you: “Do you have mutual funds?”

Puerto Rico is one of the largest issuers of bonds in the U.S. And because of a preferred tax status granted to the commonwealth, Puerto Rico’s bonds end up in many portfolios. We wanted to find out whether Puerto Rico is, indeed, the new Detroit, so we spoke with the President of Maglan Capital,

About the author

Lizzie O'Leary is the new host of Marketplace Weekend.

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