Hurricane Maria Has Transformed Puerto Rico Into A "Cash Only" Economy

Electricity, internet access and cell phone service have been offline in parts of Puerto Rico for a whole week. And with the island still struggling to rescue people stranded in remote villages, those managing the emergency recovery effort have yet to focus their attentions on the monumental task that looms ahead: Rebuilding the island’s devastated infrastructure, from communications to sewers and water

The damage, as Bloomberg reports, has essentially knocked Puerto Rico’s economy back into the 1950s. For locals who’re struggling to begin the process of rebuilding their damaged homes, shops across the island are only accepting cash.

The cash economy has reigned in Puerto Rico since Hurricane Maria decimated much of the U.S. commonwealth last week, leveling the power grid and wireless towers and transporting the island to a time before plastic existed. The state of affairs could carry on for weeks or longer in some remote parts of the commonwealth, and that means it could be impossible to trace revenue and enforce tax rules.

The situation further frustrates one of the many challenges already facing a government that has sought a form of bankruptcy protection after its debts swelled past $70 billion: boosting revenue by collecting money that slips through the cracks.

The cash-only economy could create problems for the island’s cash-strapped government, as business owners will no doubt be tempted to avoid declaring some of their revenues, depriving PR’s government of badly needed revenue.

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