angelatc
08-03-2015, 10:34 AM
Greece is the EUs problem, but Puerto Rico is one of the American empire's territories, and for the first time in its history it is about to default on its debt. And that's not all: they're going to pay the portion of the debt they owe to Wall Street while screwing the local debt holders, who are largely local credit unioAnd we know who owns the credit unions, right? Actually, that's a trick question, as the answer is two-fold. First, the members own the credit unions and second...the Wall Street banks do not.
So what you have here is a local government borrowing like crazy from the Wall Street bankers, and then screwing the voters and the local economy. The people there should be going all Iceland over this.
http://money.cnn.com/2015/08/03/investing/puerto-rico-default/index.html
On Monday, Puerto Rico must make a monthly debt payment of $483 million. Experts believe Puerto Rico will pay all of that except the $58 million due to the Public Finance Corporation. The government is strategically choosing not to pay the PFC debt because it has very little legal power to fight back in court. That means Puerto Ricans who own the debt have little ability to sue the government if it doesn't pay.
However, other debt that has more legal backing -- some of which is owned by Wall Street hedge funds -- will likely be paid on Monday. Puerto Rico has roughly same amount of debt as New York State -- a very large economy -- and the population of Connecticut.
The island's economy is a mess. Unemployment is more than double the rate in the mainland United States, and Puerto Ricans have been leaving the island in droves to look for jobs on the mainland. That only shrinks the tax base in Puerto Rico even further, making it harder for the island to pay its debts.
Oh yeah, and CNN had to toss in a little global warming:
Puerto Rico is also going through a real drought. The government is rationing water. Rodriguez says his wife's parents, who live in Trujillo Alto, a town near San Juan, have gone without running water this summer for two straight days at a time.
Other towns that aren't tourist destinations are going days without tap water too, he says. With the school year starting in Puerto Rico again, major questions loom for those on the island.
So what you have here is a local government borrowing like crazy from the Wall Street bankers, and then screwing the voters and the local economy. The people there should be going all Iceland over this.
http://money.cnn.com/2015/08/03/investing/puerto-rico-default/index.html
On Monday, Puerto Rico must make a monthly debt payment of $483 million. Experts believe Puerto Rico will pay all of that except the $58 million due to the Public Finance Corporation. The government is strategically choosing not to pay the PFC debt because it has very little legal power to fight back in court. That means Puerto Ricans who own the debt have little ability to sue the government if it doesn't pay.
However, other debt that has more legal backing -- some of which is owned by Wall Street hedge funds -- will likely be paid on Monday. Puerto Rico has roughly same amount of debt as New York State -- a very large economy -- and the population of Connecticut.
The island's economy is a mess. Unemployment is more than double the rate in the mainland United States, and Puerto Ricans have been leaving the island in droves to look for jobs on the mainland. That only shrinks the tax base in Puerto Rico even further, making it harder for the island to pay its debts.
Oh yeah, and CNN had to toss in a little global warming:
Puerto Rico is also going through a real drought. The government is rationing water. Rodriguez says his wife's parents, who live in Trujillo Alto, a town near San Juan, have gone without running water this summer for two straight days at a time.
Other towns that aren't tourist destinations are going days without tap water too, he says. With the school year starting in Puerto Rico again, major questions loom for those on the island.