From Puerto Rico's standpoint, it is certainly worthwhile to look at New York's 1970s experience. However, what stands out are the differences between the two—rather than the similarities—both in the efforts when the crisis was ongoing and the external environment for the way out.

The main difference between New York and Puerto Rico is that the fundamentals of New York City's economy were still excellent, even at its nadir. Thus, their problem was a fiscal issue. The answer to a fiscal issue is simple: reduce spending and increase taxes. A growing economy will take care of the rest.

New York experienced the decline of a once thriving apparel industry. The receding competitiveness of this industry led to a decline in jobs, particularly low-income jobs, and population migration. Parallel to this structural issue were the shenanigans of New York City Hall, approving large budget deficits, granting concessions to labor unions, etc.

However, even at the depth of its throes, New York had plenty of world-class sectors that would bring the city back if the fiscal situation was brought under control. Wall Street was the largest financial complex in the world, the U.S. advertising industry had its epicenter in New York, the city was home to many Fortune 500 headquarters, Broadway had no rivals in U.S. theater, world-class hospitals dotted the landscape, and the city remained a major tourist global destination throughout the crisis.

Contrast with Puerto Rico, whose leading world class sector, life science manufacturing (pharma, bio-tech, medical devices), has suffered from the repeal of IRS Section 936 incentives and the enactment of P.R. Law 154, a tax on inter-company sales. Tourism is competitive, but hardly a world-beater. Other industry segments are presently too small to move the needle.

Geography is another major difference. In the 1970s, some jobs and residents of New York moved to the suburbs and New Jersey. Thus, these jobs and people were still part of the New York economy's ecosystem. In contrast, population emigration from Puerto Rico—a small island in the Caribbean—has a more fearful effect for the long-term growth of its economy and the sustainability of public debt.

On the way out of its debt crisis, New York received substantial support from the state and federal governments. Despite the initial "drop dead" message from President Ford, the federal government came up with a $2.3 billion loan, representing about 15% of the New York City debt at the time. New York State took over the cost of financing the New York City university system and a portion of welfare and court systems. In contrast, Puerto Rico is unlikely to get such support.

While Puerto Rico exhibited many of the fiscal policy traits of NY City Hall up until 2006, this has not been the case since then. Continually, new taxes have been imposed and public sector employment has contracted. Among the measures taken are: a new 7% sales tax in 2006, the dismissal of thousands of employees in 2009, the major restructuring of pension plans in 2013.

Assets have been transferred to the private sector such as the Luis Muñoz Marín International Airport and Highway PR-22 in public-private partnerships with decades-long concessions. In this sense, Puerto Rico has gone beyond what New York City was ever asked to do, since the city still owns and operates its airports.

And yet, Puerto Rico is in dire straits. The reason is that Puerto Rico's problem is no longer fiscal. As James Carville would say, "It's the economy, stupid."

The real problem with Puerto Rico is not a public sector that is too large, but a private sector that is too small. As of 2014, there were approximately 15 residents for every government sector job in Puerto Rico, close to the 14.5 average for the United States. The problem is that Puerto Rico has 5.4 residents for each private sector job, while the United States has 2.3 residents for each private sector job.

The fiscal adjustments undertaken since 2006 have, as expected, contracted the economy, reduced jobs and promoted emigration. This leads to an erosion of tax collections, which in turn leads to another round of fiscal adjustment.

The way out of this predicament is to generate activity in the sectors that compete in the global economy, what economists call tradable goods. New York had, and has, plenty. Puerto Rico's performance since 2006 has been underwhelming.

Detroit took harsh adjustments, from wage cuts to public sector workers to reduction in pension benefits. It still filed for bankruptcy. The fundamentals of Detroit's economy were that of a one-industry town. When the auto industry contracted, the capacity of the city to sustain its debt collapsed.

Puerto Rico's circumstances are not close to Detroit, but they are very far from those of New York.