Sunday, July 12, 2015

The Fall of Puerto Rico. Prepare Yourself Accordingly. - Video



The Fall of Puerto Rico. Prepare Yourself Accordingly.


Published on Jul 3, 2015
Puerto Rico’s economy is in a death spiral and it could threaten the entire United States bond market. How did we get to this point and what does this mean in the big picture?

Stefan Molyneux breaks down the unspoken facts about the end of freedom, opportunity, employment and trade in modern Puerto Rico. An in depth explanation about what this means for the average Puerto Rican and Americans overall – spoiler, it’s not good!

“My administration is doing everything not to default,” Governor Alejandro García Padilla said. “But we have to make the economy grow,” he added. “If not, we will be in a death spiral.”

There will be no economic recovery, prepare yourself accordingly.

Sources: http:/www.fdrurl.com/puerto-rico

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House Judiciary Committee Unlikely to Act on Puerto Rico Bankruptcy Bill
Bond Buyer
WASHINGTON — The House Judiciary Committee is unlikely to pass legislation that would give Puerto Rican municipalities and utilities the ability to file for bankruptcy protection under Chapter 9, committee chair Rep. Bob Goodlatte, R-Va., suggested on ...
House Republicans doubt benefits of Chapter 9 for Puerto Rico: statement Yahoo! Maktoob News 
Congress balks at lifeline for Puerto RicoPolitico 
House GOP opposes bankruptcy protections for Puerto RicoWHDH-TV
The Hill-Yahoo News
all 433 news articles »



Friday, July 10, 2015

Puerto Rico: The Other Debt Crisis

Puerto Rico: The Other Debt Crisis

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While Greece has center stage in the arena of on-the-brink finance, the precarious situation in the U.S. territory of Puerto Rico may actually take a greater toll on the American economy. Last month, Puerto Rico’s governor, Alejandro Garcia Padilla, announced that the island’s public debt of $72 billion was not payable. This includes debts owed not just by the central government, but also those of public corporations, like utility companies, and cities. An archipelago of islands that lie off the tip of the Dominican Republic in the Caribbean, Puerto Rico is the third-largest issuer of state and local debt in the United States, behind California and New York. Much of the island's debt is held by individual U.S. investors in hedge funds, mutual funds or other investment accounts, raising questions about how the U.S. economy might be affected were Puerto Rico to fall behind on its debt payments. That could happen as early as mid-July, which raises the possibility that investors might sue for their funds. Chronic economic woes Yet, Puerto Rico’s plight is lost among the reports of the economic crisis in Greece. In part, this is because economic troubles in Puerto Rico are not new. The territory's economy has been in recession since 2005, when the U.S. Congress ended a tax credit designed to attract businesses to Puerto Rico. Since then, the territory has borrowed to stay afloat. “Puerto Rico’s illness is a chronic condition.” Puerto Rican congressional representative Pedro Pierluishi wrote Friday in The New York Times. “The unemployment rate, poverty rate and median household income have always been far worse than any state’s. The main cause is inequality.” Pierluishi was making the case that Puerto Rico’s status as a territory, rather than a state, has led to second-class treatment. Residents of Puerto Rico cannot vote for the president or senators, and Pierluishi is a nonvoting member of the House of Representatives. “Congress routinely treats Puerto Rico and the other territories worse than it does the states,” said Pierluishi, pointing out that medical and other benefits paid to the territory are considerably less than those provided to states. "It is little wonder then that Puerto Rico is in recession, has excessive debt and is bleeding population. Unequal treatment at the federal level, combined with mismanagement at the local level, has a debilitating effect on the island's economy." No bankruptcy protection Pierluisi has sponsored a bill in the House asking that Puerto Rico be granted bankruptcy protection, the ability to restructure in order to pay off debt. Bankruptcy is open to U.S. municipalities — the city of Detroit filed for bankruptcy in 2013 — but not to territories. “The alternative is a legal no-man’s land that benefits neither Puerto Rico nor those who have loaned the territory money,” Pierluisi said. His bill is still in committee, but bankruptcy protection for Puerto Rico has gained support from some presidential candidates. “We’re not talking about a bailout. We are talking about a fair shot at success,” Democrat Hillary Clinton said in a statement Tuesday. "I think that Puerto Rico ought to be treated as other states are treated as it relates to restructuring," Republican Jeb Bush said during a visit to the island in late April. While Puerto Rico has a population of 3.5 million, almost 5 million Puerto Ricans and their descendants now live in the States, many of them in the swing state of Florida where they are voters to be courted.




Statehood Is the Only Antidote for What Ails Puerto Rico - The New York Times - By PEDRO R. PIERLUISI - JULY 10, 2015

Statehood Is the Only Antidote for What Ails Puerto Rico - The New York Times

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WASHINGTON — PUERTO RICO’S governor recently claimed that the island could not pay all its debts. In the media, comparisons to Greece abound. But if Puerto Rico were a patient, then most commentators would have been misdiagnosing its illness and recommending improper treatment. A dose of reality is in order.
Puerto Rico is a United States territory, home to the 3.5 million people I represent in Congress. Residents have been American citizens since 1917 and have served in the United States military since World War I. There are also five million individuals of Puerto Rican heritage living in the States, and as conditions in Puerto Rico deteriorate, my constituents are now leaving for the mainland at a rate of 50,000 a year.
The analogy to Greece is inapt. Puerto Rico is not a sovereign country in a monetary union with the United States. From a constitutional perspective, Puerto Rico belongs to the United States. The federal government has almost absolute power over Puerto Rico, but has delegated to Puerto Rico about the same authority over local matters that the states possess.
Perhaps in an effort to be polite, certain commentators refer to Puerto Rico as a “commonwealth,” implying that Puerto Rico has a special status. But this word has no practical meaning, as demonstrated by the fact that several states call themselves “commonwealths.”
Puerto Rico’s illness is a chronic condition. The unemployment rate, poverty rate and median household income have always been far worse than any state’s. The main cause is inequality. Residents cannot vote for president or senators, and have one nonvoting delegate in the House. It is disheartening to see many self-styled progressives, who otherwise speak eloquently about the importance of voting rights, go silent on this subject when it comes to Puerto Rico.
Congress routinely treats Puerto Rico and the other territories worse than it does the states. Consider Medicaid, which provides health insurance for the poor. Federal funding for a state Medicaid program is open-ended, but capped for Puerto Rico. The $1 billion in annual Medicaid funding that Puerto Rico receives from Washington is about 20 percent of the $5 billion received by similar-size Oregon. Puerto Rico is also treated unequally under Medicare, even though my constituents pay the same federal payroll taxes that fund much of this program. The Affordable Care Act — Obamacare — has been the subject of partisan debate, but the law’s rarely mentioned defect is that the territories are barred from most of its new programs and protections.
The list goes on. Puerto Rico is excluded from the Supplemental Security Income program that aids the most vulnerable Americans. It does not participate in the federal nutrition program, instead receiving a block grant that shortchanges it by $450 million a year. Puerto Rico is partly excluded from the child tax credit and fully from the earned-income tax credit, which encourages low-income individuals to seek employment. Unlike a state, Puerto Rico cannot authorize its public enterprises to seek relief under Chapter 9 of the federal bankruptcy code, which impedes its recovery.
The argument that such treatment is justified because Congress does not require Puerto Rico residents to pay federal income taxes on local earnings is weak. Nearly half of all stateside households do not earn enough to owe income taxes, but are still treated equally. Moreover, because of federal tax credits, a working-class family of four in the States is likely to have greater take-home pay than an identical family in Puerto Rico.
It is little wonder, then, that Puerto Rico is in recession, has excessive debt and is bleeding population. Unequal treatment at the federal level, combined with mismanagement at the local level, has a debilitating effect on the island’s economy. To compensate for the lack of federal support, the Puerto Rico government has borrowed heavily. And when my constituents move to the States, they are entitled to vote for their national leaders and to equal treatment under federal law. So naturally they leave.
Having misdiagnosed Puerto Rico’s illness, many commentators prescribe the wrong cure, like exempting Puerto Rico from the federal minimum wage. A far wiser proposal would be to grant Puerto Rico more equitable treatment under federal spending and tax credit programs. The goal should be to close the gap with the states, not widen it.
In the near term, Puerto Rico can manage its crisis with smarter policy making, but the only enduring solution is statehood. At a recent congressional hearing, I told my colleagues: If you give us the same rights and responsibilities as our fellow American citizens, and let us rise or fall on our merits, we will rise. But if you continue to treat us like second-class citizens, don’t claim to be surprised when we fall.
In 2012, Puerto Rico voters rejected territorial status and expressed a preference for statehood. Congress responded by authorizing a federally sponsored referendum. I expect this vote will be held in 2017. If voters affirm their desire for admission, Congress must place Puerto Rico on the path to statehood. For Puerto Rico to prosper, it should be treated equally. And to be treated equally, it must become a state.
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Sunday, July 5, 2015

Recent Headlines - 5:33 PM 7/5/2015

Despair and Anger as Puerto Ricans Cope With Debt Crisis - NYTimes.com

The Bonds That Broke Puerto Rico - NYTimes.com
Puerto Rico Debt Crisis Splits Congress on Party Lines and Draws Muted Response From White House - NYTimes.com
Puerto Rico’s Bonds Drop on Governor’s Warning About Debt - The New York Times
Puerto Rico’s Governor Says Island’s Debts Are ‘Not Payable’ - The New York Times
Puerto Rico says its debt is 'not payable.' Is America's? - AEI | Pethokoukis Blog » AEIdeas
Puerto Rico Needs Debt Relief - The New York Times
Puerto Rico Can’t Pay $72 Billion Debt, Governor Warns | TIME
Puerto Rico says it can't pay its debts - Nick Gass - POLITICO
Puerto Rico’s governor: Debts are ‘not payable’ - Fortune
Puerto Rico governor warns public debt not payable | Fox News
​5 things to know about Puerto Rico's debt crisis - CBS News
Puerto Rico faces its own debt crisis | Business | DW.COM | 29.06.2015
Puerto Rico Governor: Creditors Should Help Solve Crisis - ABC News
Puerto Rico to Seek Debt Moratorium From Bondholders - ABC News
Director of Troubled Puerto Rico Public Power Company Quits - ABC News

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Puerto Rico: Another Harsh Lesson About The Consequences of Violating Fiscal Policy’s Golden Rule 

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When I make speeches about fiscal policy, I oftentimes share a table showing the many nations that have made big progress by enforcing spending restraint over multi-year periods.
I then ask audiences a rhetorical question about a possible list of nations that have prospered by going in the opposite direction.
Are there any success stories based on tax hikes or bigger government?
The answer is no, which is why I’ve never received a satisfactory answer to my two-part challenge, even if I limit the focus to fiscal policy.
And nobody will be surprised to learn that the fiscal crisis in Puerto Rico reinforces these lessons.
Writing for the Wall Street Journal, Daniel Hanson explains that the American territory in the Caribbean is on the verge of default.
As Puerto Rico struggles under the weight of more than $70 billion in debt, it has become popular to draw parallels with Greece.
The one theme that is common with the two jurisdictions is that their fiscal crises are the result of too much government spending.
How bad is the problem in Puerto Rico?
It’s hard to answer that question because government budgeting isn’t very transparent and the quality and clarity of the numbers that do exist leaves a lot to be desired.
But I’ve done some digging (along with my colleagues at Cato) and here’s some data that will at least illustrate the scope of the problem.
First, we have numbers from the World Bank showing inflation-adjusted (2005$) government consumption expenditures over the past few decades. As you can see, overall spending in this category increased by 100 percent between 1980 and 2013 (at a time when the population increased only 12 percent).
In other words, Puerto Rico is in trouble because it violated the Golden Rule and let government grow faster than the private sector over a sustained period (just like Greece, just like Alberta, just like the United States, etc, etc).
Here’s another chart and this one purports to show total outlays.
The numbers aren’t adjusted for inflation, so the increase looks more dramatic. But even if you consider the impact of a rising price level (average annual increase ofabout 4 percent since the mid-1980s), it’s obvious that government spending has climbed far too fast.
To be more specific, Puerto Rico has allowed the burden of government to rise much faster than population plus inflation.
A government can get away with that kind of reckless policy for a few years. But when bad policy is maintained for a long period of time,
the end result is never positive.
Now that we’ve established that Puerto Rico got in trouble by violating my Golden Rule, what’s the right way of fixing the mess? Is the government responding to its fiscal crisis in a responsible manner?
Not exactly. Like Greece, it’s too beholden to interest groups, and that’s making (the right kind of) austerity difficult.
Indeed, Mr. Hanson says there haven’t been any cuts in the past few years.
In the past four years, when the fiscal crisis has been most severe, four successively larger budgets have been enacted. The budget proposed for the coming year is $235 million larger than last year’s and $713 million, or 8%, higher than four years ago. Austerity this is not.
What special interest groups standing in the way of reform?
The government workforce would be high on the list. One of the big problems in Puerto Rico is that there are far too many bureaucrats and they get paid far too much (gee, this sounds familiar).
Here are some details from Mr. Hanson’s column.
…more than two-thirds of the territory’s budget is payroll. The proposed budget…contains no plans for head-count reductions. …Median household income in Puerto Rico hovers around $20,000, according to the U.S. Census Bureau, but government workers fare much better. Public agencies pay salaries on average more than twice that amount, a 2014 report from Banco Popular shows. Salaries in the central government in San Juan are more than 90% higher than in the private sector. Even across comparable skill sets, the wage disparity persists.
In other words, life is pretty good for the people riding in the wagon, but Puerto Rico doesn’t have enough productive people to pull the wagon.
So we’re back to where we started. It’s the Greece of the Caribbean.
P.S. This column has focused on fiscal policy, but it’s important to recognize that there are many other bad policies hindering prosperity in Puerto Rico. And some of them are the result of Washington politicians rather than their counterparts in San Juan. Nicole Kaeding and Nick Zaiachave explained that the Jones Act and the minimum wage are particularly destructive to the territory’s economy.
P.P.S. At least Puerto Rico is still a good tax haven for American citizens.


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Clinton Says Puerto Rican Economy Deserves 'Fair Shot'

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Hillary Clinton says Congress, White House should help Puerto Rico restructure



Tuesday, June 2, 2015

» Why Every American Should Care About Puerto Rico's Austerity Crisis 02/06/15 10:27

Mike Nova's Shared NewsLinks Review

From The Major News Sources

» Why Every American Should Care About Puerto Rico's Austerity Crisis
02/06/15 10:27 from Mike Nova's Shared Newslinks
mikenova shared this story from Latino Voices - The Huffington Post. Throngs of students hit the streets of San Juan, Puerto Rico, last week to protest Gov. Alejandro García Padilla's proposal to cut some $166 million from the budge...
» Already deep in debt, Puerto Rico now faces a new crisis
02/06/15 10:25 from Mike Nova's Shared Newslinks
mikenova shared this story . Puerto Rico has been laid low for nearly a decade by crippling debt and a near-perpetual recession that has triggered a migration to the U.S. mainland unmatched since the 1950s. Now, a growing number of peopl...
» Puerto Rico’s $72 Billion Distress Mess Reunites Lehman-Era Foes
02/06/15 10:22 from Mike Nova's Shared Newslinks
mikenova shared this story . For the hedge funds and money managers that pick over the credit market’s scrap heaps, Puerto Rico has become the new ground zero. Some of the same distressed-debt buyers that started battling seven yea...
» Dozens Evacuate Puerto Rico Condominiums After Roof Collapse
02/06/15 10:21 from Mike Nova's Shared Newslinks
mikenova shared this story from ABC News: International. Nearly two dozen people have been evacuated from their condominiums in Puerto Rico's capital after a water tank collapsed through a residential building's roof. There were no immed...
» Puerto Rico Bonds: Proceed With Extreme Caution
02/06/15 10:21 from Mike Nova's Shared Newslinks
mikenova shared this story from Comments on: Puerto Rico Bonds: Put Your Money Elsewhere. Puerto Rico is facing well-publicized financial stress. Despite a recent rally, bond prices have declined over the last year and yields have jumped...
» Changing U.S. Bankruptcy Law Will Not Help Puerto Rico
02/06/15 10:20 from Mike Nova's Shared Newslinks
mikenova shared this story . Imagine a small U.S. city that owns and operates its own electric power company. The business has been poorly run for decades. But it’s backed by the government, so it’s been able to borrow huge s...
» Puerto Rico Debt Nears Two-Month High as Utility Meets Creditors
02/06/15 10:19 from Mike Nova's Shared Newslinks
mikenova shared this story . Puerto Rico bonds traded near a two-month high as creditors met with officials about restructuring the power utility’s debt, a step that could help ease the junk-rated island’s fiscal crisis. Comm...
» Puerto Rico should pay its debts
02/06/15 10:18 from Mike Nova's Shared Newslinks
mikenova shared this story . Puerto Rico is at a crossroads. Our island government is more than $70 billion in debt and there are differing viewpoints on the best way to face this issue. As we consider our options, we should look to our ...
» In Puerto Rico Debt Talks, Things Are Heating Up
02/06/15 10:17 from Mike Nova's Shared Newslinks
mikenova shared this story . It is shaping up as a hectic summer for investors in Puerto Rico’s more than $70 billion in outstanding debt. On Monday, the U.S. commonwealth’s publicly owned electric monopoly presented creditor...
» Latino Rebels | King of the Towels: The Torture and Murder of Pedro Albizu Campos
02/06/15 10:16 from Mike Nova's Shared Newslinks
mikenova shared this story from Latino Rebels. There is a most unusual TV interview of Gov. Luis Muñoz Marín on YouTube. The interview occurred in March 1954, just after the Nationalist attack on U.S. Congress that was led by L...
» Latino Rebels | Interview with Nelson Denis, Author of War Against All Puerto Ricans, Part III
02/06/15 10:11 from Mike Nova's Shared Newslinks
mikenova shared this story from Latino Rebels. Editor’s Note: You can read Part I here and Part II here . JM: What are your thoughts on the immigration issue in the United States and how it pertains to Latinos? ND: The immigration ...
» Latino Rebels | Big Brother in Puerto Rico: How the FBI Knew Everything About You
02/06/15 10:10 from Mike Nova's Shared Newslinks
mikenova shared this story from Latino Rebels. A recently published book, They Know Everything About You , discusses the loss of privacy in modern life. It shows how corporations, governments and the Internet have eliminated the privacy ...
» Statehood for Puerto Rico
02/06/15 09:55 from Mike Nova's Shared Newslinks
mikenova shared this story from NYT > Puerto Rico. Pedro R. Pierluisi, the territory’s delegate in Congress, writes that “no people have ever prospered while being treated unequally.”
» What We’re Reading
02/06/15 09:55 from Mike Nova's Shared Newslinks
mikenova shared this story from NYT > Puerto Rico. Get recommendations from New York Times reporters and editors, highlighting interesting stories from around the web. In this installment, great reads from John Leland, Steve Lohr and ...
» Puerto Rican Mayor Faces Taxi Troubles on a Trip to Bronx
02/06/15 09:55 from Mike Nova's Shared Newslinks
mikenova shared this story from NYT > Puerto Rico. Carmen Yulin Cruz, the mayor of San Juan, P.R., hailed a taxi in Greenwich Village on Wednesday night to go back to her hotel in the Bronx. But the driver refused and kicked her out o...
» Island of misery: 'War Against All Puerto Ricans: Revolution and Terror in America's Colony' by Nelson A. Denis
02/06/15 09:53 from Mike Nova's Shared Newslinks
mikenova shared this story from [Untitled]. At the conclusion of the Spanish-American War of 1898, the New York Times concluded that “Porto Rico” [sic] was a charming winter resort, with considerable commercial value, and a v...
» It’s Time for the US to Just Legalize Weed: Latest #RebelReport
02/06/15 09:50 from Mike Nova's Shared Newslinks
mikenova shared this story from Latino Rebels. We’re back! Here’s the latest Rebel Report , the one where R.J. tells us all to just legalize it. Seriously, just do it.
» White House Formally Responds to Petition Calling for Removal of Puerto Rico’s Governor
02/06/15 09:49 from Mike Nova's Shared Newslinks
mikenova shared this story from Latino Rebels. Since an online White House We the People petition calling for the ouster of Puerto Rican govenor Alejandro García Padilla reached the necessary 100,000 signatures in a span of 30 days earli...
» 'Dark Knight' gunman wanted to avoid shooting kids
02/06/15 09:46 from Mike Nova's Shared Newslinks
mikenova shared this story . DENVER - A psychiatrist testified on Monday that Colorado theater gunman James Holmes chose a midnight screening of a movie to commit mass murder because he believed there would be fewer children present. Cou...
» Shootings, Homicides Spike; NYPD To Beef Up Patrols For Summer « CBS New York
02/06/15 09:45 from Mike Nova's Shared Newslinks
mikenova shared this story from CBS New York. NEW YORK (CBSNewYork) — Crime has been spiking in New York City — with shootings and murders up — and the NYPD is preparing for a long summer. As CBS2’s Tony Aiello re...
» NYPD Reorganizes Force for Summer Crime Spike
02/06/15 09:44 from Mike Nova's Shared Newslinks
mikenova shared this story from TWC News. Today saw some sobering new numbers from the NYPD. What once seemed like a statistical blip is now a trend. Murders and shootings are up significantly this year. NY1’s Dean Meminger filed t...
» New York Police Department Deploys More Officers to Street Patrols as Shootings, Homicides Rise
02/06/15 09:43 from Mike Nova's Shared Newslinks
mikenova shared this story . New York Police Department officials said Monday they are moving 330 more officers to street patrols to combat an uptick in shootings and homicides this year. Though overall crime in the city was down 6.6% th...
» Vladimir Putin Hides the Truth
02/06/15 09:40 from Mike Nova's Shared Newslinks
mikenova shared this story . For President Vladimir Putin of Russia, the manipulation and suppression of facts is as much a tool of his war in Ukraine as an AK-47 or a rocket launcher. He continues to insist that Russian soldiers and wea...
» Oil up ahead of OPEC meeting as dollar slips
02/06/15 09:39 from Mike Nova's Shared Newslinks
mikenova shared this story . LONDON Oil prices rose on Tuesday in response to a weaker dollar and expectations that OPEC producers will maintain their group production target at its current level and resist pressure for an increase. The ...
» 2,906,0622,906,062
02/06/15 04:29 from Mike Nova - Google+
2,906,062 2,906,062 This post has been generated by Page2RSS
» China's Military Isn't Worried About Obama - Bloomberg View
01/06/15 21:10 from Mike Nova's Shared Newslinks
mikenova shared this story from Cyber Warfare - Google News. Bloomberg View China's Military Isn't Worried About Obama Bloomberg View Chinese military officials attending a major security conference in Singapore over the weekend made cle...
» Here's how Latin America, Europe, and Africa see China
01/06/15 21:08 from Mike Nova's Shared Newslinks
mikenova shared this story from Business Insider. Sean Gallup/Getty Images China’s Asia-Pacific neighbors perceive its rise with a certain level of anxiety, stemming from China’s ambiguous strategic ambitions. Especially amon...
» Riding the Tiger of Anti-US Sentiment - Foreign Policy (blog)
01/06/15 21:08 from Mike Nova's Shared Newslinks
mikenova shared this story from Cyber Warfare - Google News. Foreign Policy (blog) Riding the Tiger of Anti-US Sentiment Foreign Policy (blog) Then on May 26, U.S. Secretary of Defense Ashton Carter called for China to halt its island re...
» Here's another sign that Russia's military policies are getting more provocative - Business Insider
01/06/15 21:08 from Mike Nova's Shared Newslinks
mikenova shared this story from Cyber Warfare - Google News. Business Insider Here's another sign that Russia's military policies are getting more provocative Business Insider The Kremlin has announced plans to dramatically increase the ...
» Obama’s DOJ To Circumvent Congress With ‘More Than A Dozen’ New
01/06/15 21:07 from Mike Nova's Shared Newslinks
mikenova shared this story from Breitbart News Network. Obama’s DOJ To Circumvent Congress With ‘More Than A Dozen’ New Gun Controls Obama’s Department of Justice is working on “more than a dozen” new gun control regulations it plans to ...
» NSA Loses Authority to Collect Phone Records as Senate Adjourns
01/06/15 21:06 from Mike Nova's Shared Newslinks
mikenova shared this story from Breitbart News Network. NSA Loses Authority to Collect Phone Records as Senate Adjourns WASHINGTON (AP) — The National Security Agency lost its authority at midnight to collect Americans’ phone records in ...
» Ukraine Names Georgia's Saakashvili as Governor of Black Sea Hotspot
01/06/15 21:05 from Mike Nova's Shared Newslinks
mikenova shared this story from Voice of America. Ukraine's Petro Poroshenko has appointed former Georgian President Mikheil Saakashvili to be governor of Ukraine's southern Odessa region, in a surprise move that is certain to raise hack...