Wednesday, March 2, 2016

How a Debt Bailout for Puerto Rico Short-Circuits Options for Reform - Washington Wire

How a Debt Bailout for Puerto Rico Short-Circuits Options for Reform - Washington Wire

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The Puerto Rican flag flies at the capitol building in San Juan. ENLARGE
The Puerto Rican flag flies at the capitol building in San Juan. Photo: Getty Images
Salim Furth is a research fellow in macroeconomics at the Heritage Foundation’s Center for Data Analysis. He is on Twitter: @salimfurth.
Puerto Rico’s governor, Alejandro García Padilla, recently spent a week in Washington begging for an indirect bailout. The governor wants Congress to give Puerto Rico access to chapter 9 bankruptcy laws, which currently don’t apply to the U.S. territory. But Puerto Rico’s problems run deeper than its$70 billion debt.
The island has already defaulted on some of its debt and diverted funds from some debts with weaker legal obligations to make other payments. Partial default may be inevitable, but resistance to business and labor reforms may be part of the reason Congress has yet to act on Puerto Rico’s requests for help. Lawmakers might also not be pleased by a Caribbean Business report Thursday that Puerto Rico may try to maneuver on federal loans to the island’s public water and sewer authority (Prasa):
Right off the bat, Prasa will no longer set aside money to service about $1.1 billion of its junior debt, most of which is guaranteed by the central government and includes federal loans made by the U.S. Department of Agriculture’s (USDA) Rural Development, which is owed $390 million, and the Environmental Protection Agency (EPA), owed $550 million.”
The story quotes the water authority’s executive president, Alberto Lázaro, saying of the suspended set-asides, “That doesn’t mean we aren’t going to pay.”
Because the debt is “junior,” the federal government’s claim on repayment is weak. Legally, “senior” bondholders and operation costs must be paid first. Because the loans are backed by Puerto Rico’s government, the cash-strapped utility can dump its obligations onto the governor.
But the commonwealth is $60 million behind in payments on its water bills so is unlikely to make good on its guarantee of the Prasa debt.
It’s not clear why the USDA and EPA lent large sums to Puerto Rico’s water utility at disadvantageous terms. Like other creditors, the federal government counted on the bankruptcy rules that apply in Puerto Rico at the time they lent funds. If Prasa cannot pay its debts, its creditors have a right to take over operations and implement reforms at the utility. That would be unpleasant for the bureaucrats who have managed Prasa, but it is likely to result in better service for Puerto Ricans.
Granting Puerto Rico access to the chapter 9 bankruptcy regulations would short-circuit possibilities for reform. Rather than giving Puerto Rico a path to growth, it could keep in place the bureaucrats who managed Prasa and other public corporations into default.
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1 in 5 Puerto Ricans will be infected with Zika Virus, warns expert

1 in 5 Puerto Ricans will be infected with Zika Virus, warns expert

1 in 5 Puerto Ricans will be infected with Zika Virus, warns expert

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More than one in five people living in Puerto Rico will become infected with Zika virus, experts today warned.
As the virus sweeps through the Americas, Puerto Rico has become America's front line in the battle against the disease.
Home to 3.5 million US citizens, the territory has a tropical landscape that provides an ideal breeding ground for the Aedes mosquito that spreads Zika.
Officials have barred local blood donations, ramped up efforts to eradicate the Aedes aegypti mosquito and are trying to monitor every pregnant woman on the island due to fears the virus increases the risk of birth defects.

Tuesday, March 1, 2016

This is the first time in four years that we heard some intelligent words from AGP | Eradicate the mosquitoes (of all kinds, types and persuasions), instead of creating the breeding grounds for them, that's another solution. And another boost and significant savings for the island 's finances.

This is the first time in four years that we heard some intelligent words from AGP. It means that he is not completely hopeless "bag of stones hibaro" as some of his political opponents paint him. Or, even more believably, that he finally went to the "Walgreen's" (the ones that still are left), bought some wax sticks, cleaned up his ears and started to listen to some good advisers:  
He recalled that there were only 2015 584 murders, "the lowest amount in nearly 30 years" and similar declines in the incidence of other crimes Type I take this opportunity to thank the Police Superintendent Jose kettles, by advances in public safety. The same made by highlighting achievements in Justice, referring to the head of that agency, Cesar Miranda, and prior to Education Secretary Rafael Roman.
He criticized the lack of word and character, referring to the lack of support for his initiative proposed by legislators of the popular majority. Meanwhile, freed from pressures of a candidate in an election year, he favored the legalization of marijuana and asked the senator Miguel Pereira project is approved for possession of limited portions of the drug is decriminalized. On the opposition to these initiatives, he condemned "the hypocrisy of many sectors in the country" and called for a health approach to address the problem of drug addiction on the island." 

Marijuana legalization might be a blessing for Puerto Rico, an economic stimulus and catalyst  that could help to turn the things around, bring more taxes and help to renegotiate the bond payments. 

No free ride, cabrones! No 50% haircut! No one will give it to you. America is loving but not stupid and is stern when it has and should be. Pay what you borrowed, and with interest, just like any one else, no special treatment for your seductive Spanish eyes. But if you can generate some extra income, and that easily, and with all these potential effects; hey, why not? It would be even better if marijuana growth and sales become the local government monopoly, with quality controls. Puerto Rico could make a mark with its progressive, smart and efficient drug policies (including the comprehensive treatment programs - that's your medical tourism, the addition and adjunct to the regular one) and turn it from the huge problem plaguing the island into the solution for the Caribbeans and the Americas. This will be one of the steps in turning Puerto Rico into the Switzerland of the Caribbeans. 

As for Zika, no reason to carry the habitual image and the role of eternal victim, including of the circumstances, in the hope of more give-out pennies of public funds. Eradicate the mosquitoes (of all kinds, types and persuasions), instead of creating the breeding grounds for them, that's another solution. And another boost and significant savings for the island 's finances. 

M.N. 
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Steps for Fixing Puerto Rico’s Fiscal Problems 

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» Puerto Rico governor calls for legalizing marijuana | Fox News
01/03/16 08:23 from Mike Nova's Shared Newslinks
mikenova shared this story . Puerto Rico governor calls for legalizing marijuana Associated Press Facebook 288 Twitter 0 Email Print SAN JUAN, Puerto Rico –   Puerto Rico's governor has called for the legalization of marijuana...
» The Right Solution for Puerto Rico
01/03/16 08:22 from Mike Nova's Shared Newslinks
mikenova shared this story from The Daily Signal. Finally, support from Congress for something other than a federal bailout for Puerto Rico or letting the commonwealth break its contracts and constitutional obligations. The Republican St...
» Puerto Rico governor calls for legalizing marijuana
29/02/16 18:21 from Mike Nova's Shared Newslinks
mikenova shared this story from World. Puerto Rico’s governor has called for the legalization of marijuana during his last public address as leader of the U.S. territory.

Friday, February 5, 2016

Puerto Rico Cries Wolf (Again) - WSJ | From Comments: USATHOUGHTS says: "What we consider corruption proves to be common practice in Spanish speaking Nations. Any Puerto Rico bailout can only result in the theft of American Tax Payer money." | Corrupt politicians in Puerto Rico and New York seemed joined at the hip in helping Puerto Rico to shed its obligations. | News Review: February - January 2016

Puerto Rico Cries Wolf (Again)