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Puerto Rico is not going to run out of money. They will still collect taxes.

They need to cut their expenses, and they don’t want to do that.

The government treasury is like a lake filled with money. Money flows into the lake (taxes), and money flows out of the lake (expenses).

My guess is that the biggest problem they have is thievery. People are not paying the taxes they should be paying and people are taking money from the treasury when they shouldn’t be.

We all kind of sigh at the rampant thievery in this country, but it’s a huge problem.

If someone is stealing, then the honest people have to pay more for the same product or service.

That leaves honest people with less money which means they have less freedom.

Thieves enslave everyone.

I’m sorry, but we are going to have to start executing thieves in this country. They enslave us and they are not afraid of jail.

The Puerto Ricans are lawless, try driving over there sometime.

This is Clinton and the democrats fault.

http://taxfoundation.org/blog/tax-policy-helped-create-puerto-rico-s-fiscal-crisis

I. Section 936 and Puerto Rico’s Nine-Year Recession

Throughout the modern economic history of Puerto Rico, one of the central drivers of its economic growth has been the United States tax code. For over eighty years, the federal government granted various tax incentives to U.S. corporations operating in Puerto Rico, in order to spur the industrialization of the island. Most recently, beginning in 1976, section 936 of the tax code granted U.S. corporations a tax exemption from income originating from U.S. territories.

In addition to section 936, the Puerto Rican corporate tax code gave significant incentives for U.S. corporations to locate subsidiaries on the island. Puerto Rican tax law allowed a subsidiary more the 80% owned by a foreign entity to deduct 100% of the dividends paid to its parent. As such, subsidiaries in Puerto Rico had no corporate income tax liability as long as their profits are distributed as dividends.

When section 936 was in effect, U.S. corporations benefited greatly from locating subsidiaries in Puerto Rico. Income generated by these subsidiaries could be paid to U.S. parents as dividends, which were not subject to U.S. corporate income tax under section 936, and were deductible from Puerto Rico’s corporate income tax.

Because of these generous tax incentives for business, Puerto Rico grew rapidly throughout the 20th century and developed a substantial manufacturing sector, though it remained relatively poor compared to the U.S. mainland. However, because section 936 made foreign investment in Puerto Rico artificially attractive – creating, in effect, an economic bubble – it left the island vulnerable to a crash if the tax provisions were ever to be repealed.

As it happened, section 936 became increasingly unpopular throughout the early 1990s, as many saw it as a way for large corporations to avoid taxes. Ultimately, in 1996, President Clinton signed legislation that phased out section 936 over a ten year period, leaving it to be fully repealed at the beginning of 2006. Without section 936, Puerto Rican subsidiaries of U.S. businesses were subject to the same worldwide corporate income tax as other foreign subsidiary.

Guam is in the same boat as Puerto Rico.
The government has systemic corruption and thousands of people simply collect welfare and do not work.

Eddy Calvo has tried to cut back on government expenses but too many people want their EBT card here and we have big naval base and big Air Force base to supplement the local monies.

Puerto Rico has less excuse there are many more people, the island is larger and has more resources and it is closer to trade routes. Guam is so isolated it will never really be self sufficient in the modern world but we could and shouold do better than we do