The Latino outreach of Republicans couldn’t be worse if they designed it to get them zero votes.
About The Author
BooMan
Martin Longman a contributing editor at the Washington Monthly. He is also the founder of Booman Tribune and Progress Pond. He has a degree in philosophy from Western Michigan University.
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In the link I see R-SC, R-TX, and R-NC. What do you expect? I’m actually surprised at Ryan (R-WI if you needed reminding), but he seems to not be a neoConfederate trying to destroy the USA.
I’d wager if you asked 100 Republicans what to do about Puerto Rico’s problems, you would get 75 answering “We should concentrate on Americans first”.
Change that to 100 Trump voters, it would probably top 98, along with calls to deport all those damned furriners.
Perto Rico is merely the latest experiment from the Mad Scientists of the Shock Doctrine plutocracy. It’s part of a sustained and deliberate effort to stripmine the middle class of everything they own.
They’re pretty much like the aliens in Independence Day, moving like locusts from country to country, consuming the wealth and when they’re done, they move on, leaving ruin in their wake.
You should see the reports of Haiti being recolonized by foreign capital seeing a great opportunity. Land grabs and forced relocations. https:/groups.google.com/forum#!topic/haiti-nation/8wRwZsiJztI
http://www.thenation.com/article/how-humanitarian-aid-weakened-post-earthquake-haiti/
thanks for this article
This is a very complicated problem that has a possible solution via the Ryan bill which is most likely supported by Jacob Lew. It tries to balance the needs of the citizens of PR with the desires and legal rights of bondholders. And somehow in the mix, the status of a nature preserve on Vieques is in question, but I’m not sure how.
Nonetheless, many Puerto Ricans have moved to Florida for better work opportunities. They seem to have settled in the I-4 corridor which is very key to electoral victory in Florida. So allowing PR to fail, to default, or to do something that makes further hardship on the citizens of PR, would be seen as an attack on the relatives of those living in Florida now. And, because those folks from Puerto Rico are citizens by birth, they can easily register to vote in presidential elections if they live in Florida, which they can’t do if they live in Puerto Rico. I’m sure those folks are vigorously watching what Congress does.
Damn, Booman. The Vultures just want Congressional assurances that US taxpayers will be on the hook for all their fancy casino bets on PR debt. That is what is causing all the furor.
http://www.economist.com/blogs/economist-explains/2016/05/economist-explains-8
Modern State Management In Too Many Places: Rather than using bonds for capital investments – as they are supposed to be used – they are sold for current expenses in lieu of raising taxes. Then they have to sell bonds to pay off the old ones, but interest rates keep rising in this scenario. From 2009-2013 the PR Had a Republican gov. Nuff said.
This also feeds into a long game anti-union plan of finally allowing states to escape the liabilities of their public union pension underpayments through (now-illegal) bankruptcy courts without taking down the muni bond market. (http://blogs.reuters.com/james-pethokoukis/2010/12/07/secret-gop-plan-push-states-to-declare-bankrup
tcy-and-smash-unions/) It is not just Republicans onboard with this, either. Wage deflation for several decades has created this problem.
From the comments: Who lent Puerto Rico $72bn? How silly can bond holders be?
Ah yes, some of these would be the 2 + 20 hedge funds who recorded fantastic profits and took their 20% profit share out, in cash, in advance, and it is the investors in the hedge fund who will bear the losses…
Were they also sliced and diced into derivatives? Where is G-S’s hand in all this and the other TBTF banks?
The bond insurance is hopeless. Bond holders are a lot more likely to be protected than any union pension funds, for sure.
Bankruptcy Would Be `Huge Mistake’ for Puerto Rico, Says Bond Insurer
http://www.insurancejournal.com/news/national/2016/02/12/398532.htm
http://www.bloomberg.com/news/articles/2016-01-05/ambac-fgic-covering-puerto-rico-bond-payments-afte
r-default
But…Lawyers are out.
http://www.wsj.com/articles/bond-insurers-sue-puerto-rico-for-redirecting-debt-payment-funds-1452234
789
An interesting bit of information from the comments…
“PR government cannot be sued in Federal Court for collection of moneys without its consent, which was only given in one $3.5 billion GO issue and one $400 million of HTA. These suits are barred by the 11th Amendment to the US Constitution which applies via case law to PR.”
More detail here Note that Congress can overturn this for bankruptcy. And since both parties are owned by the banks…
I am watching how this is going down. Just don’t think that the folks holding the PR debt are gonna go down without a fight with this Congress.
Let the games begin. A very educational post:
http://www.huffingtonpost.com/entry/puerto-rico-debt-default-explained_us_56870c25e4b0b958f65bca7a
Puerto Rico’s terms of repayment are particularly onerous because so much of its debt is now controlled by big U.S. hedge funds.
In the last year, as Puerto Rico’s spiraling debt effectively prevented it from borrowing on ordinary credit markets, creditors began selling off Puerto Rican debt… A select group of big investors, most of them hedge funds, stepped in to buy the debt for a mere fraction of its original value.
These hedge funds are known as “vultures” because of their attempts to squeeze a profit from a penniless debtor’s proverbial carcass. Vultures buy the debt of cash-strapped sovereign nations — think Greece and Argentina — at discounted rates from other investors, who have grown scared they will not be paid back. Then the vultures use every means at their disposal — the courts, political lobbying, the media — to ensure that they are paid back at the full-dollar value of the discounted debts they purchased, as well as interest. In Puerto Rico’s case, investors can buy Puerto Rican government bonds from other bondholders for as little as 30 cents on the dollar of their original value and enjoy income from interest rates that go as high as 11 percent.
[…]
It was a good deal for the investors: Puerto Rico’s bonds are tax exempt in all 50 states and the interest rate was 8.7 percent, amounting to what The New York Times estimates was “in effect, a 20 percent return.” What is more, Puerto Rico is constitutionally bound to prioritize payment of the general obligation bonds above all else.
I suggest the FED buy these, but only from the initial buyers.