Puerto Rico Officials Warn Government Shutdown Imminent

Edward Krudy, Reuters, April 22, 2015

Puerto Rico’s top finance officials said the government of the U.S. territory will likely shutdown in three months because of a looming liquidity crisis and warned of a devastating impact on the island’s economy.

In a letter to leading lawmakers, including Governor Alejandro Padilla, the officials said a financing deal that could potentially salvage the government’s finances currently 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.”

{snip}

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.

{snip}

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  • John Smith

    Latins are almost as bad as blacks for financial mismanagement.

    • propagandaoftruth

      Time to grant Puerto Rico its independence.

      • MBlanc46

        And insist that it take it. And all the Puerto Ricans who have moved to the mainland.

    • De Doc

      Puerto Ricans are by-and-large of tri-racial ancestry with significant amounts of West African input. I’m sure that has no positive effects on their abilities to manage a complex and modern economy.

    • ElComadreja

      A lot of them are at least part black.

  • IstvanIN

    Certainly Puerto Rico politicians are to blame, but, from my point of view, not entirely. I look at my own state of New Jersey as another example of gross mismanagement, and NJ was a wealthy state. The biggest perpetrator is the Federal Government. The Feds certainly have set a bad example as well as pursuing policies that have been destructive. It is possible for a very well managed state or territory to avoid this sort of debt, but for how long if all the dominoes around you are falling?

    Puerto Rico, like California, is just another canary in the coal mine.

    • California is a heap of dead miners in the proverbial coal mine.

    • TomIron361

      I’m here in the people’s republic of new jersey as well. What did us in is the twin disasters of all the minority populated cities and incredible public “service” worker wages and pensions. We’re fiscally done. But, the reason why this happened is politicians largely being non-productive workers themselves, never knew how to negotiate contracts with the state, cty., and local workers and gave everything they wanted to them over many years. Now, many of these people are taking their pensions and moving out of state as well. That’s why you always see so many out of state cars on our streets. Many people have moved away so they don’t pay our income taxes, yet they still own property here (they must pay property tax) Of course, all sorts of businesses are fleeing to escape NJ taxes. Obviously, our giant welfare population isn’t going anywhere to make things worse.

      • ElComadreja

        Sounds just like Marxachusetts.

    • MBlanc46

      Don’t forget the good folks in Illinois.

  • Too brown to fail.

    • Oil Can Harry

      Too brown to work.

    • propagandaoftruth

      Years ago an illegal Mexican student of mine – taking bonehead Spanish by the way – told me the following joke regarding the PRs…

      Why do you never see Puerto Ricans in Star Trek?

      They won’t work in the future either.

      • Q. Have you ever noticed that there are no blacks or Mexicans in the “Jetsons” cartoon?

        A. The future’s looking pretty bright, isn’t it?

  • dd121

    The answer is simple. Send all their unemployed here to take a minimum wage jobs so they can all send a few bucks home. Yeah, that’s the ticket.

    • IstvanIN

      PR is just another example of the Feds mad desire to do anything BUT develop the economy of the United States and its territories. We send jobs overseas and bring in tens of millions of migrants while places like Puerto Rico, and other locals, languish.

      Would Puerto Rico have ever been as well run and peaceful as Minnesota was or Montana still seems to be, probably not, but with proper Federal oversight it could have been a lot better.

      • TomIron361

        What is “proper Federal oversight?” Anything the federal govt. oversees is always a disaster.

      • Malgus

        “Federal oversight” will make it better?

        Cite one thing the government has ever gotten involved with that didn’t end up a complete and total cluster f-….

        Because involving the Feds always works, right?

        • Weisheit77

          “I’m from the government and I’m here to help!”

  • Puerto Ricans are even more hostile to whites than Mexicans. Give them their independence and it might start a chain reaction, with Texas, Alabama, etc going rogue.

    • Silly Frog

      I don’t know any pr’s, too far inland for the most part, I was unaware they are hostile to whites, sheesh.

      • Cheri Rodriguez

        The worst are the Jibaros i.e. Puerto Rican hillbillies. Way too many of those come to the U.S. mainland and have the rep for being rude, violent and uneducated. In big cities like San Juan, there are still some PRs with blonde hair and blue eyes—pretty much pure Spanish who never mixed with blacks and Taino Indians.

    • MBlanc46

      I’d say good riddance to them.

    • ElComadreja

      Yet a lot of them will tell you they’re white with a straight face.

  • Light from the East

    Latins tend to be more on the left of political spectrum than whites. So it does not surprise me that the left government always tries to give benefits to its people by creating more and more debts, it is the same for all liberal governments for all Western society. However, the concept of debt is that you use the money beforehand and pay off afterward. When your ability to pay off is strong, you may create more debts to liquidize the economy, but as you get used to borrowing money, your ability deteriorate little by little. At the time you notice you can no longer pay them off, it is over. Therefore, non-moderate spending by creating debts ultimately results in the collapse of the system, especially for some people without the concept of finite resources.

  • sam sneed

    “We spent it allll on CRaaaaaaaak (sob sob)”

  • ElComadreja

    I’m with you. They’ve been oppressed by us gringos long enough.

  • Paleoconn

    With so many Puerto Ricans, you wonder how the Puerto ever got the name Rico.

  • Weisheit77

    From what I read, we blew our chance decades ago when they wanted to leave. We were actually terrorized by Puerto Rican separatists. Now they would be crazy to cut loose.

    It’s a by product of another dumb war which if people remember it they only remember it for T. Roosevelt’s charge. We’ve been fighting dumb wars for quite some time. It didn’t start in Korea.

    • Cheri Rodriguez

      FALN in the 1970s and early 1980s. Big into bombings in NYC including Fraunces Tavern (January 1975). Killed four and injured 50+.

  • Hilis Hatki

    Arrived in Puerto Rico by parachuting out of a stretched C141 into a hayfield near Salinas. Ate one of the hottest peppers, appropriated from a garden, that Ive ever eaten. While standing in the pouring rain I ate the biggest potato Ive ever seen, was a meal in itself. It was brought to us, the first hot food in two weeks…it was a spiritual experience. Got shot at with .45s by Puerto Rican Police who thought we were terrorist. Traveled from Salinas to San Juan, stopping at a bar where no one let me buy my own drink.

    The people I met in Puerto Rico were way better than the Puerto Ricans in the military with me. That amazed me.

  • WR_the_realist

    Puerto Rico is basically one giant welfare case. Annexing that Spanish territory for the U.S. was a huge mistake.

  • corvinus

    Puerto Rico is imploding as we speak, and there’s nothing anybody can do about it.

    I blame free emigration to the U.S., personally. Mexico is actually developing because we at least made a show of restricting immigration from there.