Previous posts in this discussion:
PostPuerto Rico in Default (Bienvenido Macario, USA, 08/04/15 11:00 am)
I waited for the end of August 3rd to see if there will be an eleventh-hour remedy for Puerto Rico's $73 billion debt crisis. However today with $58 million in principal and interest due, Puerto Rico only managed to come up with $628,000, making the territory officially in default for the first time in history.
Puerto Rico Defaults On Debt Payment
By Megan Davies and Jessica DiNapoli
This is another reason I would rather associate my ancestral land, the Philippines, with the UK and most important of all, as a realm country. We have to remember Puerto Rico, Guam and the Philippines were all ceded by Spain to the US for $20 million in 1898.
Why would the financial fate of the Philippines be any different from that of Puerto Rico today or Guam if it remained a US Territory after WWII?
JE comments: See also this CNN item on the PR default:
Massive numbers of Puerto Ricans are leaving for the mainland. What does the future hold for the island? I'm not overly pessimistic: Puerto Rico has always been a survivor.
Puerto Rico in Default; from Ric Mauricio
(John Eipper, USA
08/05/15 10:19 AM)
Ric Mauricio responds to Bienvenido Macario (4 August), on Puerto Rico's debt default:
Bernie Sanders (I-VT), stated that this is a "moral outrage."
"At a time when 56 percent of children in Puerto Rico are living in poverty, the last thing that Puerto Rico needs is more austerity," he said in a recent statement. "The people in Puerto Rico should not be forced to suffer so that a handful of billionaires can make even more money."
According to a new investigation, many of those same billionaires demanding payment from Puerto Rico have also profited from the debt crises in Greece, Argentina, and Detroit. These hedge funds specialize in buying up "distressed" assets and pushing governments to take on debt they can't afford under predatory rates and conditions. At the same time, the groups are lobbying Congress to not allow the island to declare bankruptcy, as doing so would cut into their profits.
"The reason Puerto Rico has such unsustainable debt has everything to do with the policies of austerity and the greed of large financial institutions," said Sanders. He additionally noted that just seven years ago, Congress "acted with a fierce sense of urgency to bail out Wall Street," yet is now dragging its feet on helping the commonwealth of Puerto Rico.
Since I have consulting ties with one of the largest holders of Puerto Rican municipal bonds, I have been warning them of this for several years now. But when you have a triple tax-free (federal, state, and local) interest being sold--well, it is an easy sell. Remember, when it looks like it is too good to be true, it is too good to be true. From a client who is a Puerto Rican expat, the reason why Puerto Rico is not prosperous like the US Virgin Islands is the government corruption (far more than most).
Hmm. Bienvenido: is there government corruption in the Philippines?
JE comments: Bienvenido Macario has often answered that question in the affirmative.