Posted on 04/23/2015 7:58:50 AM PDT by SeekAndFind
Puerto Rico's top finance officials said the government of the US territory will most likely shut down in three months because of a looming liquidity crisis, and they warned of a devastating impact on the island's economy.
In a letter to leading lawmakers, including Gov. Alejandro Padilla, the officials said a financing deal that could potentially salvage the government's finances looked unlikely to succeed. It warned of laying off government employees and reducing public services.
"A government shutdown is very probable in the next three months due to the absence of liquidity to operate," the officials said. "The likelihood of completing a market transaction to finance the government's operations and keep the government open is currently remote."
The letter, dated April 21, was also sent to the heads of Puerto Rico's Senate and House as well as the governor. It was signed by the government's fiscal team, including the head of the Government Development Bank and the Treasury Secretary.
Puerto Rico, which has a total debt of more than $70 billion, is trying to raise $2.95 billion in financing while pushing through unpopular tax reforms such as a higher value-added tax and increasing a levy on crude oil to help pay for it.
Puerto Rico is largely reliant on hedge funds for its financing needs. Those hedge funds have been pushing the government to carry out tax reforms to improve its fiscal position as a condition for providing extra financing.
Government bonds have been in steady decline in recent weeks as uncertainty grows over the prospects for the island of 3.6 million people. On Wednesday, its benchmark general obligation bonds traded at an average 79.982 cents on the dollar, close to an all-time low.
(Excerpt) Read more at businessinsider.com ...
Puerto Rico is just one step ahead of the rest of the country in terms of playing out the last stages of the Welfare State. Live beyond its means, tax and borrow to pay for it and then collapse when you can’t squeeze and more tax revenue out of the producers and the suckers stop lending to you.
So...what’s the problem?
Unless Puerto Rico Petitions for Statehood and is granted, this is the best thing that could happen to them. WHAT? You CRAZY?
No. This is what America needs to reset, re-evaluate and re-focus the size and scope of government. When checks quit going out, folks will pay attention and the adults will take over. This goes for every government at every level around the world.
QUIT SPENDING MONEY WE DON’T HAVE! (In PR and the US)
Quick, take another vote for statehood so we can bail you out.
“Too big to fail or too small to save?
Great idea! How can we make it happen in my state? How about on the Federal government level?
As I have come to believe, the problem with PR is that it wants the benefits of a legitimate state in this union (as opposed to what it is now as a possession) but not the pesky tedium of its citizens being subject to Federal Income Taxes. Plain and simple.
Citizenship and the privileges thereof, access to all the entitlement riches normal American citizen (and noncitizens, too) enjoy without that damned income tax....
The benefit they could enjoy (voting Congressmen/women and Senators) juxtaposed against paying that damned Federal Income Tax. A quandary supreme....what wins in the end?
Yup. This should’ve happened to big banks and companies here as well rather than bailouts.
Also, don’t forget, they just had to have vieques back which in turn ran the US Navy out. No telling how many billions their not receiving now because the Navy is gone. That must have had an impact.
Guess who is going to pay for bailing them out?
Hint: Got a mirror?
I was just about to sa, I can see the headline now:
“OBAMA BAILS OUT PR”.
You men you want me to believe they want to eat their cake and have it too?!......NO, say it ain’t so. ;) I’m sure der leader will be happy to accommodate.
Seems to me that if illegal aliens are such a boost to our economy, then PR should be able to handle say 2 MM of them quite nicely and boost their economy as well. And there wouldn’t be any kind of language issue.
and Hillary tries to take credit!!
There’s a few houses for sale in the neighborhood guess i can expect a few Puerto Rican families to be placed there soon along with our new Somalians around the corner.
Great...
IIRC, while they don’t enjoy full Congressional voting privileges, they do, however have voting rights in party primaries.
The Fed's just keep 'printing money'. So they spend, spend, spend - because they have a bottomless well to pull from ... Eventually this scam will implode - but it is impossible to predict when. This has been going on for years, and the Washington D.C. 'leaders' see no reason to change their practices.
6 million on US food stamps
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.