Trump says Puerto Rico's debt will have to be wiped out

CNBC ^ | October 3, 2017 | Leslie Shaffer, Christina Wilke, John W. Schoen and Reuters

[2ndDivisionVet]

In an interview with Fox News, President Donald Trump said that Puerto Rico's debt will have to wiped out.

"They owe a lot of money to your friends on Wall Street and we're going to have to wipe that out. You're going to say goodbye to that, I don't know if it's Goldman Sachs but whoever it is you can wave goodbye to that," Trump said on Tuesday in an interview with Fox News, according to a Reuters report.

Trump visited the island on Tuesday, two weeks after Maria destroyed Puerto Rico's entire infrastructure system, leaving nearly 3.5 million residents without power, and tens of thousands without clean water.

The official death toll more than doubled to 34, a spokesman for Governor Ricardo Rosello said on Tuesday, Reuters reported.

Even before the storm brought Puerto Rico to a near standstill, the government there already struggled with an economy in shambles and a default on billions of dollars of public debt.

Today, the U.S. territory has nearly $70 billion in debt, an unemployment rate 2.5 times the U.S. average, a 45 percent poverty rate, nearly insolvent pension systems and a chronically underfunded Medicaid insurance program for the poor.....

[sbark]

OK then, whatever...........but then they are absolutly prohibited from borrowing money as a govt entity forever again............

this is a one strikc and your out deal.......message to every other USA govt entity.

[Diana in Wisconsin]

“Why should they get their debt wiped out? Can I get my mortgage wiped out? How about student loans and car loans.”

As long as you’re dreaming, ask to have ‘your share’ of our National Debt wiped out as well!

As of this MINUTE you owe: $167,509.00!

http://www.usdebtclock.org/

[wiggen]

But that goes here too and i’m behind that 100%.

[arthurus]

Here is where Trump’s genius as a businessman will shine. I may or may not like the outcome but he will cut the Gordian.

[arthurus]

I’m sure it can be done. The rat in the ointment will be Congress determining to bail out PR no matter what is done outside of Congress.

[arthurus]

I am sure that is part of it. His simple statements tend to be direct, straightforward and complicated.

[sagar]

“That’s a LIE.”

You’re the one in denial.

[shanover]

I am not one of those Wall Street sucks crowd but Goldman Sachs has had its name involved in practically everything within this country. Most of the time it’s not in a good light.

[JohnT416]

Do you mean like Wipe It Out, Like With A Cloth?

[edie1960]

The balance of this interview conducted by Geraldo Rivera will air later Wednesday morning on Fox & Friends.

[UnwashedPeasant]

“Barack Hussein Trump”

[JustTheTruth]

The money is gone. They are broke. Trump is correct, the bond holders SHOULD lose their money for lending excessively to deadbeat socialists. The main thing is that the President cannot let the unwise creditors socialize their losses by shifting them to tax payers and to those who hold dollars (through monetization)! GOOD FOR PRESIDENT TRUMP!!! 👏🏻👏🏻👏🏻👏🏻👏🏻👏🏻👏🏻👍

[Garth Tater]

US States and Territories can't declare bankruptcy - it's not in the law. That's why lenders are willing to lend them such huge sums of money.   3.5 million Puerto Ricans (half of them dirt poor) and yet the govt owes ~ $120,000,000,000. If the lenders had been worried about a PR bankruptcy they never would have allowed the numbers to get so big.

BUT PR really is broke and Congress - who never met a Democrat voter they wouldn't pander to - passed a law in 2016 that set up an oversight board to "manage" Puerto Rico's debt problem. That board has the ability to set the amount and the rate at which PR can be made to pay their debts. They could (if they wanted to) declare PR unable to pay back anything. This would effectively be a bankruptcy and is PR's best bet to get out of their debt problem.

President Trump's talk about a PR bankruptcy sounds to me like he is going to be looking for Congress to pass a law allowing PR the right to declare bankruptcy. This would be a big mistake as it would set a precedent for Illinois, California and other soon to be broke States to demand the same right.

[eyedigress]

He did say it but it comes with prison or mass oversight or both.

[eyedigress]

Clean yourself up.

[AZLiberty]

Right -- to me, this means no bailout.

Goldman Sachs is on their own. Not that GS would be stupid enough to hold any PR debt. But clients who hold GS mutual funds will be screwed.

[KavMan]

If this means more Puerto Rican votes for the GOP & Goldman Sachs gets screwed out of $$$ then go for it! =)

[gunsequalfreedom]

I don’t want a bailout for a dependency at the expense of citizen taxpayers, especially after they were spending like drunken sailors for years because of tax breaks we gave their bonds.

They are for all intents bankrupt...and facing massive infrastructure rebuilding. I would not be counting on getting paid if I owed them money. Trump is only saying what is reality.

And people can complain all they like about how an entity got into trouble but that does not change the situation. Controls are usually put in place to make sure it does not happen again.

That is my take anyhow. Just picked your post to reply because you seem like a really nice FReeper. All the Best to you.

[rb22982]

Actually, allowing defaults to bond holders would be a good thing for a host of reasons, primarily to discourage poor lending practices at the local government level

[rb22982]

What does bankruptcy have to do with being dem or rep? Banks having to eat a bad loan is hardly D or R - just is