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PostPuerto 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.