Democrats propose allowing Puerto Rico to declare bankruptcy

The Hill ^ | March 14, 2016 | Peter Schroeder

[jazusamo]

Why do I suspect US taxpayers will be footing the bill if this goes through.

[Resolute Conservative]

Why not? It appears lot of people have no qualms with bankruptcy.

[goldstategop]

The Uniparty is going to do it anyway... they want to see which side can claim the credit first.

[DoughtyOne]

[Founding Father]

Of course, can’t have the bankers (masters) upset.

[blueunicorn6]

The government of Puerto Rico has been running a Ponzi Scheme for years.

No more money for these con men!

Here’s an idea. Cut your expenditures until they match what you take in for taxes.

[Vigilanteman]

Actually, they should do this not only for Puerto Rico, but also fiscally irresponsible states such as California and Illinois.

Part of the cost of making such a bankruptcy declaration will be receivership managed by a third party to renegotiate all the public employee sweetheart pensions as well as loss of statehood and the right to vote in federal elections.

I, for one, would love to see the fiscally responsible counties in California to be able to band together and apply for readmission to the union as new conservative states.

[PGR88]

Bankruptcy means that bondholders should take the losses.

Unless of course they support the Clinton Foundation, in which case there can no doubt be found some money to make them whole.

[Jack Black]

Why not just let them default on the bonds? Bonds have risks, which are balanced by rewards. PR bonds have been a highly rewarding investment, but the risk overtook that and now they are going to be defaulted on.

Why do any new laws need to be passed? If the bond-holders feel the terms of the bonds require things to happen in PR that are not happening (like selling assetts, or requiring higher taxes on residents) let them sue to enforce those terms.

[Vigilanteman]

That would work if it would alone solve the problem. But my understanding is the Puerto Rico, like certain far left states, got into their fiscal mess not just by borrowing and issuing excess bonds but also by making promises such as public employee pensions which they could not keep.

Think about it. Default on the bonds with no way to resolve the rest of the problems and all they have done is shut off access to any new borrowing, not addressing root causes.

[libertylover]

Part of the cost of making such a bankruptcy declaration will be ... loss of statehood and the right to vote in federal elections.

Really? Sounds a lot better if that's true.

[nascarnation]

The Dems will negotiate...

“Either make it a state (2 guaranteed Dem senators and reps in perpetuity) or let them go bk”

[Vigilanteman]

That’s not the way it is now, but the way it ought to be to forestall such a possibility as listed in post #12.

[jazusamo]

I agree about Dems making it a state, they want it so bad they can taste it.

[Pearls Before Swine]

Why do I suspect US taxpayers will be footing the bill if this goes through.

Because you're an alarmist? No, because you're a realist.

This is a twofer for the Dems. It's a nose of the camel under the tent for socializing state and local debt, and it should play well with Puerto Rican Hispanics, wherever they may be. The first is more important--after all, if we can help out Puerto Rico, why can't we help out those poor firemen, police, and teachers whose exorbitant pensions promises cannot be met by the underfunded Illinois pension plans?

[Darth Reardon]

According to Sen Menendez, PR got into this mess because they weren’t being given enough of our money.

“Congress has to act immediately to fix the federal funding shortfalls”

[Jack Black]

Think about it. Default on the bonds with no way to resolve the rest of the problems and all they have done is shut off access to any new borrowing, not addressing root causes.

Yes, I see what you mean.

So, lets assume that they are not allowed to declare bankruptcy. First they default on the Bonds, then they have to start defaulting on everything else, which is even harder to pay without access to borrowing, it's strictly a cash-in, cash-out basis.

So, then the pensions go unpaid. That is clearly a lot of hardship for people relying on them ..

It's hard for me to see this ending anyway except a bail-out. "Evil Republicans want to let poor old Pureto-Rican pensioners starve", that always works with the squishy cusckservatives.

So, maybe the bankruptcy is the way to go?

[Hotlanta Mike]

Too big to fail...too big to jail.

[bgill]

Big surprise, not. We said they would eons ago.

[dfwgator]

BOHICA.