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

David_N said:
So now you admit that the collapse of manufacturing is a large problem for Puerto Rico, and not the spending.
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No, I don't. You don't seem to understand this very well. The SPENDING is entirely the problem. You and Deuce's argument is like a guy jumping from a plane without a parachute and, upon his inevitable demise, you blaming gravity. The problem was entirely foreseeable and Puerto Rico kept blindly spending at levels they could not sustain if the economy went into declined.

It's their fault.

Hell, your idea of "forward planning" requires spending if the government wants to encourage other jobs.
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No, no it doesn't. Spending more money is not the only way of diversifying the economy... no shocker you don't seem to know that.

You can also attract new and varying business by favorable tax policies that attract new business and public/private partnerships to promote education in growing industries.
 
California and Illinois are heading in the same direction. They've been underfunding public pensions and playing con games with bonds and other financing instruments. Last time I checked, about a year ago, 7 California cities had gone bankrupt, including San Bernadino. San Francisco is a mess, so is LA.

Birmingham, AL went bankrupt a few years ago and many of the city's retirees who thought they were going to enjoy their golden years had to go back to work.

On the federal level, we are eventually going to crash too... it is inevitable. We're $20 trillion in debt now, over 100% of GDP, with $trillions more planned; and, $hundreds of trillions in unfunded mandates planned. Unfortunately, since most Americans are morons, and almost all Democrats are morons, they keep believing demagogic politicians that printing/digitizing debt is manna from heaven that will never stop and never have consequences.

Obama prattled on during the 2008 campaign about how "immoral" it was for Bush to run up the roughly $4+ trillion debt he added, bringing the total national debt to about $9 trillion by the time he left office. Then Obama with both Democratic and Republican Congresses runs up another $11 trillion in just 8 years?? What's wrong with that picture??

Americans deserve to suffer the consequences for being so stupid.
 
jmotivator said:
No, I don't. You don't seem to understand this very well. The SPENDING is entirely the problem. You and Deuce's argument is like a guy jumping from a plane without a parachute and, upon his inevitable demise, you blaming gravity. The problem was entirely foreseeable and Puerto Rico kept blindly spending at levels they could not sustain if the economy went into declined.

It's their fault.



No, no it doesn't. Spending more money is not the only way of diversifying the economy... no shocker you don't seem to know that.

You can also attract new and varying business by favorable tax policies that attract new business and public/private partnerships to promote education in growing industries.
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Puerto Ricos economy would have gone under without the spending due to a collapse in manufacturing/construction, a decrease in the population, unemployment high, etc.. They got screwed!
Yeah, puerto Ricos tax policy is already better then the United States for businesses based on what I've read. It's unfortunate, because no Matter what Puerto Rico does, they're screwed. Unless we help them eliminate the debt and help them spend. That won't happen though.
 
natsb said:
It is not the banks that will suffer the most if PR does not pay its debts.
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I know they won't, they'll get bailed out.

As we can see, the people that will suffer the most are those everyday people who trusted their life's savings to a Government promise. It is they who own most of the debt, not the banks.
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I'm sure they do. But those bond holders would not necessarily fair any better under Chapter 9 bankruptcy. It is entirely the fault of Puerto Rico government that they issued so many bonds that they could not sustain during economic hardships. People invest in government bonds because they are supposed to be less risky in such times, but the Puerto Rican government ran their bond system like they were Bernie Madoff. Those people who have been put out by the collapse should be given a portion of state held property in repayment and allow the new shareholders of the former public land sell it off to developers.

Liberal Governments have a 100% track record of failing when the OPM runs out. Why is this such a hard lesson to learn?
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Well, yeah. How often do we need to see this played out? Government is nothing more than every country's largest monopoly with all the corruption you can expect from such a rank.
 
longview said:
I did not say that! If the territory of Puerto Rico, were granted the freedom to become autonomous,
They could form a new country, the US citizens there would not loose their citizenship,
but would gain dual citizenship to the new country.
Like a child born to US citizens in Canada has dual citizenship.
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Or we could just make them a state.
 
Deuce said:
Or we could just make them a state.
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That would improve the status of Mississippi, but would it help Puerto Rico?
I think in the last referendum 61% were in favor of statehood.
 
David_N said:
Puerto Ricos economy would have gone under without the spending due to a collapse in manufacturing/construction, a decrease in the population, unemployment high, etc.. They got screwed!
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They screwed themselves! And no, had they spent less than they collected in taxes, stockpiled money to cover bonds, and lived within their means then they could have weathered the economic downturn without defaulting on their debt. Everyting you blame this on is simply a symptom of bad management. In the last few years their bond system amounted to nothing more than a Ponzi scheme.

Yeah, puerto Ricos tax policy is already better then the United States for businesses based on what I've read. It's unfortunate, because no Matter what Puerto Rico does, they're screwed. Unless we help them eliminate the debt and help them spend. That won't happen though.
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Not exactly. Puerto Rico's tax policy favors trade with the US if the company in question is overwhelmingly owned by Puerto Ricans -- if more than 25% of a company's stock is owned by non-Puerto Rican's then that company pays 30% taxes, 24% or less and they pay 10%. So no, that policy doesn't exactly promote outside investment in Puerto Rico. It's that kind of nationalist protectionism that is killing the PR economy.
 
jmotivator said:
They screwed themselves! And no, had they spent less than they collected in taxes, stockpiled money to cover bonds, and lived within their means then they could have weathered the economic downturn without defaulting on their debt. Everyting you blame this on is simply a symptom of bad management. In the last few years their bond system amounted to nothing more than a Ponzi scheme.



Not exactly. Puerto Rico's tax policy favors trade with the US if the company in question is overwhelmingly owned by Puerto Ricans -- if more than 25% of a company's stock is owned by non-Puerto Rican's then that company pays 30% taxes, 24% or less and they pay 10%. So no, that policy doesn't exactly promote outside investment in Puerto Rico. It's that kind of nationalist protectionism that is killing the PR economy.
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If they had spent less, their recession would be worse then it is now. Like I said, it's a disaster since they don't control their own currency.
 
Deuce said:
A bankruptcy law update in 1984 had this inserted by Strom Thurmond:
https://www.govtrack.us/congress/bills/98/hr5174/text

That little insert is what did it.
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No it didn't. Reread your quoted law and the Chapter 9 law.

The law has always excluded Puerto Rico, U.S. Virgin Islands, Guam, American Samoa, and The Commonwealth of the Northern Mariana Islands. In the law you quoted Puerto Rico and DC were being considered a state for other purposes of paragraph (44) and the rider was added to not give Puerto Rico Chapter 9 protection when the other territories didn't. This isn't a case of Puerto Rico being singled out, it is a case of ensuring the laws in all territories were the same.

Not strange. You've been spouting off about reckless spending, how they should have reduced spending, but aren't familiar with the cuts they did make or the costs they were required to bear.
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LOL! "Costs they were required to bare" is absolutely meaningless when they are in the process of defaulting on their state bonds. :roll:
 
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David_N said:
If they had spent less, their recession would be worse then it is now. Like I said, it's a disaster since they don't control their own currency.
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No. All that the excessive spending did was bring on the ruin we see today.

I see a lot of people who promote what is essentially half-assed Keynesian economics as the solution to pretty much all economic problems - meaning they are all gung ho on government spending all the time. The problem is that the Keynesian system also requires spending within your means and saving money during the fat years to spend in the lean years.

If you are going to use the Keynesian system, especially in states that don't control their own currency, then you have to follow both stages of the Keynesian system or you wind up like Puerto Rico.
 
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jmotivator said:
Hahah! No. It's funny how the people who are most inclined to defend Keynesian economics only seem to understand the spending half of it. You spend more when the economy tanks and pay for it by spending less and saving when the economy is healthy.

All that the excessive spending did was bring on ruin.
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Puerto Ricos economy hasn't been healthy for a long time.
 
David_N said:
If they had spent less, their recession would be worse then it is now. Like I said, it's a disaster since they don't control their own currency.
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it would still be a disaster. sure they can hand over 422m of their on currency but then it would be worthless.
plus there is nothing that says their bond holders have to accept it.

I know I wouldn't.
 
ludin said:
it would still be a disaster. sure they can hand over 422m of their on currency but then it would be worthless.
plus there is nothing that says their bond holders have to accept it.

I know I wouldn't.
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Puerto Rico doesn't have their own currency, unless I've been reading the wrong information.
 
David_N said:
Puerto Rico doesn't have their own currency, unless I've been reading the wrong information.
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they use the US dollar same version of it.

however even if they could print their own money who wants a sack of something that was just printed to pay a bill?
their currency would sink in no time.
 
ludin said:
they use the US dollar same version of it.

however even if they could print their own money who wants a sack of something that was just printed to pay a bill?
their currency would sink in no time.
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What do you think the US and Japan do?
 
David_N said:
What do you think the US and Japan do?
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the dollar is backed by the US economy.
what economy does PR have?

very little if any. our currency is only worth what people think it is.
our economy adds a good bit of strength into that backing.

even the federal government just don't print money like that. bonds are issued and dollars are sold.
even then it is closely watched to how much money is in the system.

PR doesn't nearly have the economic strength of the US or japan.

if the US just started printing money and handing it to people the value of the dollar would drop as well.
that is why they don't do that. you seriously need to stop believing this MMT garbage.
 
David_N said:
Puerto Ricos economy hasn't been healthy for a long time.
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Actually, Puerto Rico's GDP has had positive growth uninterrupted since it became a US territory in 1950. They have not seen significant recession in all of that time. The current economy hasn't even gone negative growth yet, it is simply in a slow down:

sJrADu.png


(source)
 
jmotivator said:
Actually, Puerto Rico's GDP has had positive growth uninterrupted since it became a US territory in 1950. They have not seen significant recession in all of that time. The current economy hasn't even gone negative growth yet, it is simply in a slow down:

sJrADu.png


(source)
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Puerto Ricans leave in record numbers for mainland U.S. | Pew Research Center
Puerto Rico’s nearly decade-long economic recession has led to people leaving the island for the mainland in numbers not seen in more than 50 years, new Pew Research Center analysis of Census Bureau data has found.
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Clearly they're not doing to well.
 
jmotivator said:
Oh I know they are definitely not doing too well, their basket case government makes it hard to stick around. They're like a mini-California.

Also, I question the "nearly decade long recession" when their GDP has increased year over year all that time.
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Their unemployment rate jumped past 16% in 2008-2009. Back down to 12-ish now.
 
longview said:
That would improve the status of Mississippi, but would it help Puerto Rico?
I think in the last referendum 61% were in favor of statehood.
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Think of all the flags that would have to change.
 
Blue_State said:
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.
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PR is a mess. 1/3 of its workforce works for the government and there are generous Welfare benefits for people who dont work so they have no reason to look for work. Sound familiar?
 
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