Posted on 07/04/2015 6:36:17 AM PDT by SeekAndFind
Its economy has been shrinking for years, its debts have been piling up for even longer, and its government has finally admitted that even brutal tax hikes and spending cuts wouldn't be enough for it to pay back everything it owes.
I'm talking, of course, about Puerto Rico. Its governor, Alejandro García Padilla, admitted to the New York Times on Sunday that the island is going to have restructure its $72 billion in debt that is "not payable." Now, if it sounds like you've been hearing some variation of this story for years now, it's because you have—just about Greece. It also borrowed too much, was forced into self-defeating austerity as a result, and would arguably have been better off using its own currency rather than the one its much bigger neighbors do.
But despite these similarities, there's still a big difference between two. Greece's banks have had to close due to the panic that their euros might get turned into drachmas that wouldn't be worth anywhere near as much, while Puerto Rico's banks are fine since people know their dollars are going to stay dollars. And this, more than anything else, shows us what it takes to create a well-functioning currency union.
Now, we normally don't think of the U.S. as the "dollar zone" like Europe has the euro zone, but that's really what it is. Cities and states that, economically-speaking, are big enough to have their own currencies share a single one instead—and, more importantly, a single monetary policy, too.
(Excerpt) Read more at washingtonpost.com ...
This is less the rhetorical question than some might think. San Bernadino and Stockton have already declared bankruptcy, yet as far as I know they continue to operate. In short, I'm still waiting for the actual consequences of "going broke" to be manifested . . . anywhere in the government sector.
I take that to mean that Puerto Rico's territorial gov't debt is not backed up the federal gov't.
That's the good news!
The difference between Greece and PR is great.
One is a place where the people are lazy, feel too privileged to have to work and are devote marxists. The other the people are devote marxitsts, feel too privileged to have to work and lazy.
I don’t see how anyone can compare the too.
Well, in Puerto Rico they speak Spanish; in Greece they speak Greekish.
Less bone smugglers in PR
Whew! And I was so afraid that the speculators would lose in both Greece AND Puerto Rico.
From all I’ve heard, Puerto Rico is almost a 100% ‘Come Yet’ Territory.
Two countries “depending on the kindness of strangers”.Sounds *exactly* the same to me.
No, anyone expecting economic or scientific competance from the WaPo is wrong.
Hellooooooo, we are talkin’ “journalists” here.
You know, the ones in college who did not have the stuff to get a real degree.
I wouldn’t doubt it.
What worried me was, that since it’s a territory, Puerto Rico’s gov’t debt might be federal gov’t debt.
But the article indicates it isn’t.
Of course, the RINOQs in Congress might bail them out anyway. Or Obama might find some way to it unconstitutionally.
It’s amazing somebody gets paid to write this 4th grade drivel.
Time was that people would buy a newspaper to get the real, truthful, accurate information on subjects as well as clear, insightful and objective opinions.
That is, to put it as gently as possible, pathologically delusional.
Since we can agree that the best use of the Washington Post is as an Absolute Negative Barometer (i.e. anything they say is the direct opposite of fact), this particular piece indicates:
1) Puerto Rico is not only in the same trouble as Greece, the situation is even more grave (especially for WaPo) because default/failure in PR reflects on not only the US and not “merely the Eurozone”, but most particularly on liberal policies instituted during the terms of FDR right up to the current administration.
2) The dollar, like the US economy, is now a fiction supported only by thieves and liars in government and their accomplices including WaPo and the writer of this piece. Having a few cities here and there go belly-up because of lib policies and associated debt loads can be glossed over for a time at least, but the jolt associated with a Puerto Rican default could not be concealed and could very well bring down the entire house of cards.
3) Finally, and IMHO the worst things about the situation (at least for WaPo), they can’t hide this story anymore, haven’t yet constructed a plausible Conservative villain to blame and have actually had to publish this sorry pack of denial and crass BS.
Our three-year-old grandson would be ashamed to let stuff like this out of his mouth.
We nationalize everything and tell China and the others to go to hell? Wait I know, we already have the answer, we print more money, reduce our defence and open our borders to third worlders giving them more for free than our hard working citizens struggle to earn........................oh wait, barry's had that plan in place for years!
“What happens when the US cannot pay its own debt? “
Our banks then rob its depositors like Greece is currently about to do.
Am betting FedGov is on the hook, cause “we took em over” from the poor Spanish.
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.