SAN JUAN, Puerto Rico––Elizabeth Claudio pointed to the lone outlet in the wall of her classroom of fourth graders. She complained to Puerto Rico Governor Alejandro García Padilla that it was the class’s only outlet and that running multiple devices––such as a television, air conditioner, or a fan––would trip the breaker and that multiple classrooms using electricity together would cause the whole building’s power to fail. She pointed to the cracks in the wall and the broken fans in the room, which already sweltered in early May as the humidity settled in like a blanket over an 83-degree day.
The exchange was likely one that García Padilla has had with teachers in San Juan before. But the other guest in her classroom, Treasury Secretary Jacob Lew, was new here. And, despite the dozens of children running and playing as they normally do, offering excited singsong chants of “Buenos tardes, Jack!” when the dignitaries left the room, Lew’s mission was somber. He was here to assess just what might happen if Puerto Rico’s debt crisis blooms into a full-on disaster.
The debt crisis in Puerto Rico has been discussed mostly in terms of its dire economic outlook, with wide-reaching consequences from potential defaults, including destabilized municipal-bond markets and litigation. The fallout could spread to the mainland, and it has already impacted the economy of states like Florida as a factor in mass emigration. Secretary Lew and the Treasury Department have a direct interest in those outcomes, but instead of spending time meeting with high-ranking economists or officials, the bulk of Lew’s time was spent interfacing with vulnerable people who might be affected by debt fallout. This was a humanitarian visit.