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Puerto Rico Will Officially Default on a $422 Million Payment Monday

Blue_State

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Governor Alejandro Garcia Padilla said in a televised speech that he signed the moratorium on Saturday in what he characterized as a “painful decision” based on inaction from the U.S. Congress, which continues to debate a legislative fix for Puerto Rico’s $70 billion debt load.

“We do not want a bailout. We haven’t asked for a bailout. We haven’t been offered a bailout,” he said as the U.S. territory’s economic crisis enters its most dire stretch yet.

Puerto Rico Will Officially Default on a $422 Million Payment Monday - Fortune

This is no bueno. I was unaware that our territories did not have the same financial tools as our states. That sounds like an easy fix, but it will not stop the spending. Also, Puerto Rico hasn't released financial statements since fiscal year 2013. They need to get that out so we can see the damage.
 

OrphanSlug

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This will have all kinds of impacts, politically and economically.
 

lpast

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Puerto Rico for decades refused to vote to become a state. Ive heard alot of reasons for it, the two main being. They didnt want to lose their culture and identity and they dont want to pay american taxs.

It seems to me that becoming a state would greatly help their position
 

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cpwill

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Puerto Rico Will Officially Default on a $422 Million Payment Monday - Fortune

This is no bueno. I was unaware that our territories did not have the same financial tools as our states. That sounds like an easy fix, but it will not stop the spending. Also, Puerto Rico hasn't released financial statements since fiscal year 2013. They need to get that out so we can see the damage.

I've been reading up some, and I think I've got this solved. Puerto Rico needs to borrow massive amounts of money, and then spend it paying half it's unemployed populace to bury jars of cash, and the other half digging those jars back up.

Magico-Multipliero-Presto-Growtho-ChangeO!!!! Instant Wealth!!! In the future we'll all be dead!!!
 

JANFU

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Maybe they should try spending more money?

IIRC a State has the ability to file for bankruptcy, PR does not have this ability?
 

ludin

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Maybe they should try spending more money?

i thought they could just print the money and that they didn't have to worry about it.
they issue their own currency I do believe that isn't tied to anything.

ol wait you mean this is a myth created by people.
 

AliHajiSheik

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Puerto Rico has a number of tools that don't include Bankruptcy. Not paying is one of them. The next is to negotiate with creditors who face the prospects of not getting paid anything. Of course, the creditors can also start foreclosing on Commonwealth property.

"Puerto Rico, a tropical paradise in economic purgatory, faces a $70 billion debt bill it knows it cannot pay, a staggering 45% poverty rate and a shrinking population as citizens flee to the mainland." How much did they know they could pay when they were issuing these bonds--bonds that people only wanted because they were federal tax free?
 

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This will have all kinds of impacts, politically and economically.

It will bring the nation to its knees!!!!!

9630661-Cartoon-man-begging-for-mercy-Isolated-on-white-Stock-Vector-beggar.jpg
 

David_N

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I've been reading up some, and I think I've got this solved. Puerto Rico needs to borrow massive amounts of money, and then spend it paying half it's unemployed populace to bury jars of cash, and the other half digging those jars back up.

Magico-Multipliero-Presto-Growtho-ChangeO!!!! Instant Wealth!!! In the future we'll all be dead!!!

Puerto rico uses the USD and it isn't a currency issuer. It's much like a US state. Your example is stupid.
 

David_N

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Spending money on interest payments is a far better use of your taxpayer's money instead of using it on infrastructure and schools.

I don't understand why we're going to make people in Puerto Rico suffer.
 

Deuce

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IIRC a State has the ability to file for bankruptcy, PR does not have this ability?

They literally do not have this ability for some completely inexplicable reason. An exception to Chapter 9 was made for PR and literally no legislative notations exist on it. There was no debate in Congress. There is no legislative record as to why this amendment was inserted. The only thing we know about this change is that Strom Thurmond added the change before the bill went to vote, and Congress voted it into law.

It will bring the nation to its knees!!!!!

Umm, a government failing to make payments is kind of a big deal.
 

jmotivator

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I don't understand why we're going to make people in Puerto Rico suffer.

WE have nothing to do with the suffering of the people of Puerto Rico. Their profligate spending has everything to do with their suffering.
 

digsbe

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Sounds like they need to be more fiscally responsible. Don't spend what you don't have and don't expect others to bail you out.
 

Deuce

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WE have nothing to do with the suffering of the people of Puerto Rico. Their profligate spending has everything to do with their suffering.

No, it's not "profligate spending" that caused this issue.

Sounds like they need to be more fiscally responsible. Don't spend what you don't have and don't expect others to bail you out.

It's not a bailout. Nobody is asking for us to just give them money. People need to stop letting these stupid memes float around like this.
 

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They literally do not have this ability for some completely inexplicable reason. An exception to Chapter 9 was made for PR and literally no legislative notations exist on it. There was no debate in Congress. There is no legislative record as to why this amendment was inserted. The only thing we know about this change is that Strom Thurmond added the change before the bill went to vote, and Congress voted it into law.

They had to vote on the law to know what was in it.

Umm, a government failing to make payments is kind of a big deal.

Indeed it is. That is why some people actually care about deficits.
 

David_N

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WE have nothing to do with the suffering of the people of Puerto Rico. Their profligate spending has everything to do with their suffering.

We don't? We're the ones who are bickering over forgiving some of their debt. It's a real pain in the ass when you're not a currency issuer to deal with unemployment and other problems. Puerto Rico tried.
 

digsbe

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It's not a bailout. Nobody is asking for us to just give them money. People need to stop letting these stupid memes float around like this.

So is it going to cost the US taxpayer anything? Either way patching up bad policy just encourages it. Only thing I think I could accept is Puerto Rico being managed by an outside committee similar to when Detroit went under since they clearly can't handle themselves.
 

David_N

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Sounds like they need to be more fiscally responsible. Don't spend what you don't have and don't expect others to bail you out.

A sovereign currency issuer like the US or Australia/Japan doesn't have to worry about spending what they don't have. In fact, spending has to happen before any saving can occur.
 

David_N

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So is it going to cost the US taxpayer anything? Either way patching up bad policy just encourages it. Only thing I think I could accept is Puerto Rico being managed by an outside committee similar to when Detroit went under since they clearly can't handle themselves.

It will not cost the taxpayer anything. Politicians are stupid.
 

Deuce

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They had to vote on the law to know what was in it.
There's no defense here, this isn't a partisan issue. Nobody has any good reason PR shouldn't be able to use this process to get their debt under control.


Indeed it is. That is why some people actually care about deficits.
PR cares but for some reason the way out of this mess has been taken from them.
 

Deuce

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So is it going to cost the US taxpayer anything? Either way patching up bad policy just encourages it. Only thing I think I could accept is Puerto Rico being managed by an outside committee similar to when Detroit went under since they clearly can't handle themselves.

Are you saying the exemption from Chapter 9 is justified?
 
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