but at least they chased the Navy out so they got that going for them... right?
Posted on 10/17/2015 12:40:51 PM PDT by Lorianne
Officials in the Treasury Department are discussing a radical and aggressive response to the fiscal chaos engulfing Puerto Rico that could involve a broad debt exchange assisted by the federal government.
The proposal calls for the federal government to help Puerto Rico collect and account for local tax revenues from the island’s businesses and residents, according to people briefed on the matter who spoke on the condition of anonymity because they were not authorized to publicly discuss the proposal. An inability to collect all the taxes owed is widely seen as contributing to Puerto Rico’s debt crisis.
The tax proceeds would be placed in a “lockbox” overseen by the Treasury and eventually paid out by the Treasury to the holders of the new bonds that Puerto Rico would issue in the proposed exchange. Since the Treasury would effectively become the paying agent for the new bonds, they would be more attractive than the bonds that creditors now hold.
That would make it easier for Puerto Rico to exchange the new debt with creditors who hold bonds that have been devastated in value since the island warned this summer that it could not pay its debts.
(Excerpt) Read more at nytimes.com ...
What? Turning junk bonds into somewhat less junk bonds? Or something?
Let me give you an IOU for that IOU you have there.
The Republican former PR governor had the right approach and started PR on the right path. But he lost the election, in no small part to the image some Republicans create that Republicans are anti-Hispanic. Stupidity on our part has consequences.
How about we fire the political party that brought this crisis to fruition and never let them get the keys again?
A lockbox? Wow, they’re serious.
It would seem that Puerto Ricans made the stupid mistake, not us.
Where us our Congress who authorize federal expenditures?
Busily approving as per Boehner’s continuing resolution and raising debt ceiling
but at least they chased the Navy out so they got that going for them... right?
As Mark Stein always says, WE ARE THE BROKEST NATION IN THE HISTORY OF THE WORLD.
They should hang a Debt Clock in the Hose, Senate and the Oval Office.
Here we go....bail out Puerto Rico, Chicago, Detroit, LA....the list will go on.
It’s ok, though, because the government will make sure it all gets paid back.
Puerto Rico, being part of the US, could provide an absolute haven for over-55 middle class retirees! They already have unbelievable tax advantages. They can legally send their underclass to the mainland. And they need help???
Median IQ in PR is 84. Pointing out that cognitive fact and the ingrained culture of corruption on PR is not racist it is realist. Deal with it. Fortuno lost, btw, because he threatened to moderately curtail the gravy train of government employment.
The only answer is defaulting. Pick up the phone, declare all those bonds as being invalid and non-redeemable and repudiate the debt completely.
Live on cash for the next few years. The billions the island territory will save would be well worth the action. There is no possible way to repay the debt at this point, the creditors have gotten too greedy, demanding high interest for increased risk - give them what they demand - risk.
Yes, I know this will effectively force the same action in Greece - big deal. Neither can ever hope to repay their debt, there aren't enough resources in either place for this to happen. But by doing so, you cure a worldwide ill - yes, Africa repeatedly defaulted, so did some nations in South America.
But you'll shake the financial market to it's foundation by asserting sovereign control over debt. And this is a shakeup long overdue. Once predatory lenders learn that there are consequences for their usury, they will do two things - they will become far more willing to work with those they already lent money to, and will be far more conscious that extending too much credit will result in default.
That is if they like being robbed and dealing with surly people who seem to dominate government service down there. There are nice folks in PR, but there are much nicer places to retire.
I hope this lockbox is more secure than the one for Social Security.
I know PR is a mess, from limited exposure. I’m saying the solution is so easy. They could set up safe, guarded enclaves with everything middle class over-55 retirees want in a retirement environment.
I am reminded of the great Milton Friedman:”If you put the federal government in charge of the Sahara Desert, in 5 years there’d be a shortage of sand.”
Before we kick ass of the “predatory lenders” we should at least recognize that it is our government that borrows all the money in the first place. It takes two to tango. If politicians didn’t run up the public debt so much, the “predatory lenders” wouldn’t even be much of an issue. Just saying. “We have met the enemy and he is us.”
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