Posted on 06/29/2015 6:43:57 AM PDT by SeekAndFind
The governor of Puerto Rico told the New York Times that the island cannot pay back it's $72 billion debt and will seek permission from its creditors to defer payments.
The news precedes an address by Governor Alejandro Garcia to the Puerto Rican legislature, where he will unveil a budget that cuts about $670 million from a $9.8 billion budget, while setting aside another $1.5 billion to pay the debt.
Gov. Alejandro Garcia Padilla's spokesman, Jesus Manuel Ortiz, confirmed that the island's government is seeking to defer payments while negotiating with creditors.
He confirmed comments by Garcia that appeared in a report in The New York Times published late Sunday, less than a day before Garcia is scheduled to deliver a public address amid debate on a $9.8 billion budget that calls for $674 million in cuts and sets aside $1.5 billion to help pay off the debt. The budget has to be approved by Tuesday.
"There is no other option. I would love to have an easier option. This is not politics, this is math," Garcia is quoted as saying in the Times.
The island's debt figure is four times that of Detroit, according to the Washington Post.
Puerto Rico's bonds were popular with U.S. mutual funds because they were tax-free, but hedge funds and distressed-debt buyers have been stepping in to buy up the debt as the island's economy worsened and its credit rating dropped.
Puerto Rico's constitution dictates that the debt has to be paid before any other financial obligation is met. If Garcia seeks to not pay the debt at all, it will require a referendum and a vote on a constitutional amendment, said Rep. Jenniffer Gonzalez, spokeswoman for the main opposition party.
(Excerpt) Read more at americanthinker.com ...
And no doubt they kept buying knowing Fedzilla would have to come in and bail them out too.
Privatize the profits, socialize the losses.
Debt is not imaginary and never goes away unless actually paid off. So what happens when states’ debt is “paid for” with fiat money?
I believe that could happen as well.
Remember all the calls here for 51st state?
I thought everyone there was on welfare?
:: snort ::
Yeah you can look back and laugh now! ;-)
“Debt is not imaginary and never goes away unless actually paid off. So what happens when states’ debt is “paid for” with fiat money?”
Debt can also go away when there is a default on the obligation. It may be we are about to be treated to a spectacle where Obama, the Democrats, and the media unite to demand the US Treasury partially bail out Puerto Rico. If the GOP doesn’t agree it is because they are prejudiced against brown people and the poor. If the GOP caves and supports a Puerto Rico bailout from the US treasury, a precedent has been set. When Illinois, California, New Jersey, Michigan, Massachusetts or another liberal f
I no longer have any confidence the Republicans will hang tough on a Puerto Rico bailout, particularly with election year politics underway. Rove will tell Boehner and McConnell to capitulate and get it out of the news.
They get 1.5 billion a year in food stamps.
At the going rate that’s $750 million a year they could get trading them for cash...
I remember G.H.W. Bush's call early-on during his run for the Presidency.
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