What do we think about Puerto Rico's Default

Posted by $ Thoritsu 7 years, 11 months ago to Economics
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Self governing territory will not set up austerity measures to address this long-foreseen problem.
What do we think about the issue?
Was it contributed to by being a territory vs state?
Can/should this show up on the 2016 election?
SOURCE URL: http://www.bloomberg.com/news/articles/2016-05-01/puerto-rico-will-default-on-government-development-bank-debt


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  • Posted by $ blarman 7 years, 11 months ago
    If we had any values of self-sufficiency, we'd order them into austerity until they got their fiscal house in order. Of course, since we don't have our fiscal house in order, there's no chance that's going to happen.

    My bet is that the Feds bail them out by paying off that $2 billion hidden in an appropriations bill.
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  • Posted by $ AJAshinoff 7 years, 11 months ago
    The adage "sh*t or get off the pot" has been on my mind about Puerto Rico for many years. I've been there twice and twice I was annoyed at the open contempt they had for us. They have their cake and are eating it too, this needs to change.
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    • Posted by scojohnson 7 years, 11 months ago
      Like any dependent welfare class of people... the deeper we dig into our pockets, the less they want to do and the more they want.
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      • Posted by $ AJAshinoff 7 years, 11 months ago
        I think its more a matter of shame. Initially, when they receive they are grateful but then over time they start to feel their dependency which only amplifies their sense of hopelessness (lack of self reliance - "if they stop suppling me I'll starve"). Its from this hopelessness they come to resent those who give.

        Vicious cycle.

        Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.
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        • Posted by Flootus5 7 years, 11 months ago
          And then if you keep giving him a fish everyday, lo and behold you have an entitlement syndrome.

          Withhold the fish, and maybe someone teaches them self how to fish.

          Unless someone deems the fish is an endangered species and there are too many individuals learning how to fish......

          Haha!
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    • Posted by Herb7734 7 years, 11 months ago
      They don't need to get off the pot. The pot has been given to them. If defecating stands for actually doing the right thing, then here's some graffiti that while crude, does seem appropriate:
      Here I sit, broken hearted,
      Came to shit and only farted.
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      • Posted by $ AJAshinoff 7 years, 11 months ago
        close :)

        Here I sit, broken hearted,
        paid my dime and only farted.

        lol, I heard about how it used to cost a dime from my grandfather whenever I asked to stop to use a rest room. Its funny what one remembers.
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  • Posted by mia767ca 7 years, 11 months ago
    Puerto Rico's govt was financially irresponsible (copying the Federal govt)...if they are rewarded with a chapter 9 bailout, then the remaining states in the union are incentivized to be irresponsible and it is a race to bankruptcy and a chapter 9 bailout bottom...the slide to collapse and chaos accelerates...prepare...
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  • Posted by $ jbrenner 7 years, 11 months ago
    It's time for a bankruptcy sale. Divide Puerto Rico up, and sell it to the highest bidders.
    Then do the same for all "public" lands in the USA.
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    • Posted by $ 7 years, 11 months ago
      Assume you mean sold to private buyers to generate cash, and not another country. Not interested in Yellowstone being a Chinese territory.
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      • -1
        Posted by $ MichaelAarethun 7 years, 11 months ago
        Unilaterally give them full independence they cost too much for too little gain. Why is it only one way. the get to vote for Statehood, status quo or some other choice. Why shouldn't the USA have a say. They are of no use any more Unlike Guam, but I'd send US Samoa back to Samoa as well.

        Come to think of it give PR to the Chinese.
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        • Posted by $ 7 years, 11 months ago
          You want a Chinese naval base in the Caribbean?
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          • Posted by DrZarkov99 7 years, 11 months ago
            I hate to break it to you, but the Chinese already control most Caribbean port operations, as well as the major operations and maintenance contracts for the Panama Canal. Pretty soon, Americans may have to learn two languages: Spanish and Mandarin.
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            • Posted by $ 7 years, 11 months ago
              A little different to run a commercial port and "home" warships. However, you may be right about Mandarin for economic reasons.
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              • Posted by DrZarkov99 7 years, 11 months ago
                The Chinese are buying American properties and companies at a breakneck pace. I have a friend who does partnership business with the Chinese, and many businessmen who've reached mandatory retirement are nervous the government may decide they have too much wealth, so they're seeing the U.S. as a tax haven and a way to stash money.

                With money comes influence, so it can't be too long before a Caribbean country is persuaded to allow berthing Chinese warships. The Monroe doctrine has long been toast.
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                • Posted by $ blarman 7 years, 11 months ago
                  Much of that is because the Chinese are selling off their T-bills and need somewhere else to put their money. Land is always going to be an asset in fixed supply. As an added bonus, they also get to start affecting politics. Talk about a Manchurian Candidate in an upcoming election is going to be far more fact than fiction...
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                • Posted by $ 7 years, 11 months ago
                  That sounds like wealthy Chinese want to become Americans. If so, great!
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                  • Posted by $ MichaelAarethun 7 years, 11 months ago
                    They aren't as free to act freely as we envision quite yet. but they are moving to wards the capitalist economic model while - and many nations share this portion - deciding what individual and social needs will be supported and by whom.

                    Since I won't use the word for that bastard failed system of Marx, Engels, and Sanders, I'll put it this way.

                    "Capitalism with a Conscience."

                    No more 20th Century Motors, Ma Chalmers, slave systems.
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                    • Posted by $ 7 years, 11 months ago
                      As long as the power remains so concentrated, nothing good will happen there. Amazing people talk about income inequality in the US, but not other countries or the US vs the world. If those people were so interested in real income inequality, they'd be giving away their earnings (even lower class below the poverty line) to the rest of the poor world.
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                      • Posted by $ Susanne 7 years, 11 months ago
                        The Monroe Doctrine is being replaced (or has been replaced) with the Lee Chan Yaun (or in modern Mandarin, Li Xiannian) Doctrine... which stems from the good ol' Mao Tse Tung (Mao Zedong) doctrine - if you can't conquer them at war, conquer them some other way - in this case, buy them out.

                        Capitalism in action, brought to you by a nefarious Communist society, which still believes in "Workers of the World, Unite".

                        ...and Mao would either be abjectly horrified... or very, very proud...
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          • Posted by $ MichaelAarethun 7 years, 11 months ago
            Why not? Who do you think built the third locks at the Panama Canal and put in the trans ship to ship pipeline etc. etc. etc.
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            • Posted by $ 7 years, 11 months ago
              Quite a different thing than a naval base. Look what they are doing in the South China Sea. Don't need that in the Atlantic.
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              • Posted by $ MichaelAarethun 7 years, 11 months ago
                PR had a Naval Base and USAF Base. All that is gone. That is the only reason they were held as part of the Spanish American War winnings. Guam also. The rest given their independence Philippines etc. American Samoa is a welfare state with an unused harbor that is a cess pool of leavings from the Star Kist and Prudential Factories. A place to avoid. Unlike the country of Samoa they have no national pride.

                So what is the reason for retaining them?

                Votes? If they qualify to votes they should be regularized in the system of the country and not as their Governor wants held as just another welfare mecca. no pride, no reason to exist hell they refuse to learn English No attempt to join with nor meld with the nation as a whole. Partly because they are not welcome.

                Why prolong the agony Giver them their Independence and a couple years worth of change over budget Pretty soon it will be just a another Caribbean vacation spot with a lot of maquiladore operations. and larger factory operations.

                Unlike Panama they have no reason to exist as a vassal property of the USA.
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                • Posted by $ 7 years, 11 months ago
                  Nice island though. To bad it is full of moochers, rather than supporting the excellent resort and growing possible there in a controlled way.
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                  • Posted by $ MichaelAarethun 7 years, 11 months ago
                    they drove out the military to build a resort island of Vieques and then Roosevelt Roads and then some other facility. All the former employees on those military bases making I presume full union wages became bed pad emptiers working if that was even done. That was their choice. With all the choices in the Caribbean why anyone would choose PR is beyond me. I just as soon go back to Gitmo
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                    • Posted by $ 7 years, 11 months ago
                      Look up, not down, my friend, look up. Why choose PR in the Caribbean? It is a beautiful island and can be better, much better. This can happen when people start letting the monotonic optimization of capitalism run the place, instead of a welfare state.
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                      • Posted by $ MichaelAarethun 7 years, 11 months ago
                        Which equals an argument for independence.

                        However there is a fly in the ointment. Why should Puerto Rico NOT declare default. They would after all only be following the example set for them by Bush II and O Bamba. in 2008 and the following years.

                        Maybe all the States shiould do the same thing which would tend to destroy this misbegotten spawn of hell from Washington DC.
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                        • Posted by $ 7 years, 11 months ago
                          That works for me. Let's just not throw out the lovely island with the pond scum.
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                          • Posted by $ MichaelAarethun 7 years, 11 months ago
                            I'm guessing that means move the current inhabitants to some other location? Adak? OK so the current high bid is Keep PR as a non-populated nature preserve. What about some Botanists or Zooologists or the staff at Barralitos Brewery? I believe the preferred requirement is 500,000.. pause.. I just checked it says one representative and two Senators minimum regardless of population or size. Thus the popularity of making the Federal Capitol a State. Thing is they don't want to be a State just a finca.
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    • Posted by scojohnson 7 years, 11 months ago
      I have the same thoughts about our federal government... realistically, start selling the land, it has millions of square miles of it here in the west. Can it all be sold at once? of course not, but nothing would be hurt by just setting up an on-going program to start divesting of all of the real estate holdings, use the proceeds to directly reduce the national debt.

      I'm sure many a millionaire would pay a premium for relatively untouched lands with beautiful mountain views.

      Add the incentive of a Gulch with several years of tax abatement...
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  • Posted by johnpe1 7 years, 11 months ago
    we Should Not Bail People Out. . not States, not
    territories, not businesses, not bureaucracies, not
    individuals.

    this is why we owe nineteen trillion! -- j
    .
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  • Posted by $ CBJ 7 years, 11 months ago
    Let them default. With very few exceptions, governments should not borrow money period. Anyone purchasing unbacked government debt assumes the risk of default and should not be bailed out if that risk becomes reality. The prospect of a bailout encourages irresponsible behavior by governments and bond investors alike. On the other hand, if the default is allowed to stand, the PR government will find it very difficult to borrow any additional money and will be forced to live within its means, without the necessity of any further action by the rest of us.
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  • Posted by Esceptico 7 years, 11 months ago
    I love it. PR has given us a real-life, living, and colorful demonstration of the welfare state. The blame, of course, will be placed on individuals and the excuse given that only if they had better people running the system who had more powers, all would be fine. I can hear Atlas Shrugged now: "It's not my fault!" he [Lawson] yelled. "It's the fault of the rich who still had money, but wouldn't sacrifice it to save my bank and the people of Wisconsin! You can't blame me!”
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  • Posted by peterchunt 7 years, 11 months ago
    This is what happens when you live beyond your means. P.R. may be a territory of the US, but is more resembles a third world country, yet it supports first world safety nets. Until they correct the root cause of their problem, nothing will change. Let them fail and maybe a restructuring will force common sense on them.
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  • Posted by chad 7 years, 11 months ago
    When you have economies based on fiat currency which is nothing but debt it will always reach a fiscal point where selling bonds to cover previous bonds will finally be realized as the Ponzi Scheme it always was. If they were a state it would be easier to hide the scheme longer with other debt options but eventually it all runs out.
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  • Posted by $ jbrenner 7 years, 11 months ago
    Puerto Rico's default is the latest in what will be a long "progressive" list of loan payment defaults. What I don't get is, with all of the debt worldwide, why can't I find a decent interest rate on bonds anywhere like I did in the 1980's (and many other people did before that in the 1970's)?
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  • Posted by dukem 7 years, 11 months ago
    I recently turned down a lucrative offer to build cannabis growing facilities in PR (legally) but the flying back and forth from the west coast, as well as having to be there a lot, led me to back out.
    The last time I was there was after the Cuban missile crisis when I was a midshipman practicing naval assaults storming the beaches of Vieques, Roosevelt Roads had a substantial naval facility and was a welcome respite for our squadron. And time moves on, not always forward.
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  • Posted by wiggys 7 years, 11 months ago
    They over extended themselves as a territory just like the states and the usa government so what is the big deal.

    They just like the states and the usa government are getting their just deserts.

    the best part of living in P.R. is that they don't need heat in their homes and they can live off of the see all the while drinking rum to soften their misery
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  • Posted by $ Olduglycarl 7 years, 11 months ago
    Time for tough love...for them and ourselves...time to sever ties to them and the worlds kakistocracies including ours.

    How?...I have no clue except showing my proverbial bow finger for all to see...a meaningless gesture these days. I've not much enthusiasm for much else at this point.

    Maybe tomorrow I will feel differently...
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