Posted on 06/04/2014 6:36:07 AM PDT by SeekAndFind
As U.S. officials and private investors become more concerned about the financial fate of Puerto Rico after nearly a decade of economic decline, attention has turned to an $8.5 billion bank, which may be the key to whether this island of 3.7 million people flourishes or self-destructs.
Puerto Rico's recession is now in its eighth year. The closely watched Economic Activity Index has plummeted from 155 to 128; the unemployment rate, at 14.1%, is more than twice that of the mainland U.S., and the total number of workers has dropped from 1.3 million at its peak in December 2006 to just under 1 million in April.
U.S. officials are worried because Puerto Rico, a territory acquired through an invasion during the Spanish-American War in 1898, is as much America's responsibility as a state.
Unless changes occur soon, the island appears headed for fiscal calamity. Government debt has doubled in a decade to $70 billion. That is, as the Wall Street Journal put it, "gigantic compared with the roughly $18 billion owed by Detroit when it filed in July for the largest municipal bankruptcy in U.S. history."
U.S. financial officials have been meeting for months to figure out what to do. As a headline on the website of the National Legal and Policy Center put it, "Will Puerto Rican Bonds Trigger a Mainland Bailout?"
According to The Economist magazine, when compared to other U.S. states and territories, "The island's current debt...is the third-largest behind California's and New York's, despite a smaller and poorer population." Not only is Puerto Rico smaller and poorer, its economy isn't growing, so it has shaky prospects of paying the debt back. Personal and corporate income tax revenues are down by one-third since 2007.
(Excerpt) Read more at realclearmarkets.com ...
Here’s an idea. Send Obama over there to finish them off. That way they can be put out of their misery quickly.
Obama wants to make them a state.
The politicians have created a dependent basket case. They need an ever expanding permanent underclass. They have succeeded.
Of course he does. It's non-white and a financial basket case. The Dems would get reliable votes at the polls, and an additional 2 reliably forever Dem senators.
Unless changes occur soon, the island appears headed for fiscal calamity.
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The same thing could be said about the “mainland”. Puerto Rico may be the canary in the coal mine.
WHAT?
It was not "acquired through an invasion". We freed them from the clutches of the decaying Spanish Empire.
And America does not have "responsibility" for any of its constituent states. The people of that state have the reasonability for their own well being and economy.
Or Beijing comes in and saves the day.
RE: It was not “acquired through an invasion”. We freed them from the clutches of the decaying Spanish Empire.
Well, if they want to go back to the clutches of the Spanish Empire... why not?
PR situation is a symptom of a sick financial system based on the US dollar. IAW we borrowed and spent too much money and printed too many US dollars to avoid recessions, which has reached critical mass. Today Wall Street, US Treasury, and Federal Reserve is desperately trying to prevent the system from imploding my distorting the market with gov and gov sanctioned private intervention on asset prices. Along with this desperate actions to prop up the US dollar are EU and Japan who have intertwinned their financial system with the US dollar.
Remember, all empires start rotting from the peripheral, and the core is the last to fall. The US financial implosion will start overseas in Japan or EU. Japan has stagnated for 2 decades under QE which reached 200 percent of Japan’s GDP. EU has their PIIGS nation who will require more bailout money. The US is facing bankruptcy of cities and now an entire territory. Question for all freepers are what are you doing to prepare and protect your family and wealth with?
Don’t half of the Puerto Ricans live in NYC?
I like to be in America
Okay by me in America
Everything free in America
I thought NYC was the capitol of Puerto Rico.
Puerto Rico is trying to turn around by lowering taxes and attract investment. For some people the tax rate is 4%. Companies are looking at relocating there.
Is there anyone left in Puerto Rico?
RE: Is there anyone left in Puerto Rico?
They’re all in New York :)
RE: Puerto Rico is trying to turn around by lowering taxes and attract investment.
They had a decent governor who was doing that before 2012, Luis Fortuño.
He lost the elections by less than a percentage points.
Now the island has gone back to its profligate ways.
Sounds like they need a $15.00 per hour minimum wage bill to save the day!
A former Spanish colony, Puerto Rico was retained by the United States primarily as a coaling station for the U.S. Atlantic Fleet. With the closure of the Vieques Training Area bombing and gunnery range, the US Naval Station at Roosevelt Roads was closed and its duties transferred.
Puerto Ricans are automatic US citizens, but have not assimilated with US mainland culture and have remained strongly Puerto Rican-Spanish culture.
Puerto Ricans pay no US domestic taxes, yet qualify for all the same programs and welfare subsidies as Americans paying taxes. Taxes collected in Puerto Rico are used in PR along with considerable subsidies from the US government to the island.
On numerous times, Puerto Ricans have been asked whether they: 1) continue as a Commonwealth of the US (status quo); 2) become a US state; or 3) get full independence from the US. Not surprisingly, the majority of Puerto Ricans have voted for the status quo (Commonwealth) because they get to have their cake and eat it too.
Many US companies have moved to Puerto Rico to escape US taxes — PR is a tax haven for them.
Puerto Rico is totally Democrat controlled from top to bottom and have been for decades. If their economy is in a death spiral, it is owned by the Democrat Party that controls Puerto Rico.
America needs to jettison Puerto Rico as a Commonwealth and give them full independence. Puert Rico can take its place beside Cuba and Venezuela as another ‘Progressive’ bastion of enlightenment and plenty.
Now there is a blatant lie, how can you compare apparently accurate figures to the Bolshevik the zero misadministration shovels to the sheeple in the media?
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