We know who will win that battle.
Puerto Rico’s constitution offers bondholders strong guarantees that they would be paid before pensioners and public workers if the government went broke. ‘‘I can assure you that Puerto Rico will not default,’’ Padilla said. ‘‘Puerto Rico will pay our debts. It is a constitutional obligation. But, for me, it is also a moral obligation.’’
Paying the looting bankers that designed bad deals and looted pension funds is a "moral" obligation according to the Puerto Rican leader.
Is there really anything left to $ay except who wrote that Constitution?
"Puerto Rico struggles with economic distress; Reels from exodus as recession keeps its chokehold" by Michael A. Fletcher | Washington Post, December 08, 2013
Recession keeping its chokehold five years after it is allegedly over?
SAN JUAN — Boxes and wooden crates filled with household items bound for the US mainland are stacked high in the Rosa del Monte moving company’s cavernous warehouse, evidence of the historic rush of people abandoning Puerto Rico.
The economy here has been in recession for nearly eight years, crimping tax revenue and pushing the jobless rate to nearly 15 percent.
Meanwhile, the government is burdened by staggering debt, spawning comparisons to bankrupt Detroit and forcing lawmakers to severely slash pensions, cut government jobs, and raise taxes in a furious effort to avert default.
The implications are serious for Americans outside Puerto Rico both because a taxpayer bailout would be expensive and a default would be far more disruptive than Detroit’s record bankruptcy filing in July.
Officials in San Juan and Washington are adamant that a federal bailout is not on the table, but the situation is being closely monitored by the White House, which has named an advisory team to help Puerto Rican officials navigate the crisis.
The island’s problems have ignited an exodus not seen here since the 1950s, when 500,000 people left for jobs on the mainland.
Now Puerto Ricans, who as citizens are free to move and work anywhere in the United States without passports or green cards, are again leaving in droves.
‘‘We used to move a lot of machinery into Puerto Rico, and executives who worked in the pharmaceutical industry here,’’ said Neftaly Rodriguez, whose father founded Rosa del Monte. ‘‘Now we are packing people up to go out. Everybody is looking for a better opportunity.’’
********************
The brutal combination of a long recession, a shrinking population, and overwhelming debt has left Puerto Rico’s political leaders struggling to tame at least $70 billion in debt while marshaling the resources to revive a shrinking economy and battle corrosive social problems, including a murder rate that is nearly six times the US average.
The crisis has left Puerto Rico’s governor, Alejandro Javier Garcia Padilla, juggling competing demands for budget cuts and other types of austerity demanded by Wall Street rating agencies, and the incentives and other spending needed to ignite growth.
‘‘Sometimes, you are between the wall and sword,’’ Padilla said in an interview.
Not long after Padilla took office in January, Wall Street debt rating agencies downgraded the island’s bonds to just one rung above junk status. Like states, the commonwealth of Puerto Rico cannot file for bankruptcy. Also, Puerto Rico’s constitution offers bondholders strong guarantees that they would be paid before pensioners and public workers if the government went broke.
‘‘I can assure you that Puerto Rico will not default,’’ Padilla said. ‘‘Puerto Rico will pay our debts. It is a constitutional obligation. But, for me, it is also a moral obligation.’’
Still, with Detroit’s bankruptcy filing fresh in the minds of investors, the downgrade ignited widespread concern that the island was sliding toward default, which would hurt many investors across the United States.
Also see: Detroit Bankruptcy Means Government Can Break Promises
Then you owe them nothing, not even loyalty.
Because of their high yields and exemption from federal, state, and local taxes, Puerto Rican bonds are held by three out of four municipal bond mutual funds, according to Morningstar, a market research firm.
Which is why you need pension cuts and benefits givebacks.
‘‘Some people might say, ‘This is their problem.’ But Puerto Rico is part of the United States. You own this problem,’’ said Pedro Pierluisi, a Democrat who is Puerto Rico’s nonvoting representative to Congress. ‘‘It is not like you can ignore it.’’
We own it because of the lie that started the Spanish-American War.
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Globe ignored it after that.
Related(?):
"Associated Press Pushes for Statehood for Puerto Rico
“ In Florida, Puerto Ricans want equality back home, “ ran the AP headline on December 1, 2013. Newspapers
and other
news organs
around the country picked it up.
It’s supposed to be a news story, not an editorial or opinion piece, but
the message, for all its subtlety, is very strong. Puerto Rico should be made the 51st
state. Here is how it begins:
Puerto Rican attorney Iara Rodriguez waved campaign signs and cheered at the 2012
Democratic Convention as President Barack Obama was nominated. But the
delegate's euphoria faded when she returned home and, like everyone else living
in Puerto Rico, could only watch as the rest of the country voted for its
commander in chief….
A
loose coalition of civic leaders in Florida and on the island is seeking to
leverage the state's growing Puerto Rican presence to turn this issue into
something the rest of Americans can easily understand: a fight for equality and
the right to vote. Puerto Ricans are U.S. citizens by birth, but because the
island is only a territory, its residents can vote for president only if they
move to a state.
"It's
a citizenship issue. It's like when women weren't able to vote, when
African-Americans weren't able to vote," Rodriguez said. "One of the
reasons that my husband and I moved here to Florida was to not feel like a
second-class citizen."
You
can believe that if you want, but in Puerto Rico she was just another Puerto
Rican, who shared the culture, the language, and the traditions of virtually
everyone else. In Florida, voting
rights aside, if she is culturally and linguistically representative of the
average Puerto Rican, she is bound to feel like a second
class citizen almost everywhere she turns, whereas that would not have
been the case had she stayed home.
The article continues:
In
a 2012 nonbinding referendum, just over half of voters rejected the island's
territorial status for the first time. In a follow-up question, over 60 percent
of those who answered said they favored statehood over partial or outright
independence.
That
may be true as far as it goes, but this Latino Decisions
opinion piece shows us that because of the way the questions
were posed, and the large number of blank ballots related to the second
question, the simple conclusion that the AP wants us to reach might not be
quite so simple.
Whether
or not the preference for statehood on the island might have crested 50 percent
for the first time, this AP statehood promotion piece comes at a particularly
inopportune time for anyone trying to sell La Isla
del Encanto as any sort of a great new
addition to the Union. Only a
couple of months ago, the British magazine, The Economist,
suggested that in Puerto Rico, the United States might have its
own version of the European Union’s Greece on its hands:
Puerto
Rico, an American territory, risks a Greek-style bust. With $70 billion of debt
outstanding, the equivalent of 70% of its GDP, it is more indebted than any of
America’s 50 states. (Puerto Rico is not technically a state, but its bonds are
treated as if it were.) Yields on its bonds have soared as high as 10%, as
investors fret it may be heading for a default.
Like
Greece, Puerto Rico is a chronically uncompetitive place locked in a currency
union with a richer, more productive neighbour. The
island’s economy is also dominated by a vast, inefficient near-Athenian public
sector. And, as with Greece, there are fears that a chaotic default could
precipitate a far bigger crisis by driving away investors, and pushing up
borrowing costs in America’s near-$4-trillion market for state and local bonds
Near the beginning of its article the AP made a
passing reference to Puerto Rico’s “economic crisis,” grudgingly acknowledging
that it might better explain the recent wave of emigration than does the search
for political equality, but in its conclusion it laid even the economic mess,
in so many words, at the feet of political status:
[San Juan attorney and Obama campaign
adviser Andres] Lopez is among a number of statehood advocates who believe the island's current economic crisis cannot be resolved until
Puerto Rico's status is.
So
far, all 37 states that have asked to join the union have been accepted. Hawaii
earned statehood just two years before Obama was born in Honolulu. The
president has said he favors statehood, if a clear majority on the island
support it.
"Every indication is that's
where we'll end up," Lopez said. "But who's going to claim the
political credit for doing it?"
Thus does the Associated Press
transport us into the dream world of the Puerto Rico statehood enthusiast. The island has managed to become a
political basket case while its residents don’t pay federal taxes and receive
most of the same federal benefits that mainlanders do, but giving up its
remaining tax advantage will somehow make things better. Similar thinking led a pro-statehood governor in 1996
to give up the corporate tax benefit that had
brought the U.S. manufacturing firms to the island, and their predictable
exodus is now a major cause of the current crisis.
So what’s behind this widely
disseminated AP article? Why aren’t
we hearing the arguments presented by the people who elected the current
anti-statehood governor of Puerto Rico?
Even more important, why
doesn’t the American press ever present the Puerto Rico political status issue
to the American people in terms of what might be good for them? This is a question I explored with a
couple of articles some fifteen years ago.
The shorter of the two, updated and with fresh links, follows:
Today's Washington Times provides powerful new support to my thesis,
heavily documented in my new article on my web site, "CIA Plots Puerto Rico Statehood,"
that the globalists who are pulling the strings of the CIA, as well as that of
our overall political leadership, are scheming to slip statehood for Puerto
Rico in on the residents of the 50 states before they can wise up to what is
going on.
To see the hand of the CIA in
America's press look for something that the newspapers are virtually
unanimously for, across the political spectrum, but the American people are
heavily against. Three good examples come readily to mind, the invasion of
Iraq, the NAFTA, and the findings
of the Warren Commission. I was challenged on this by a Puerto Rican
statehood zealot on the soc.culture.puerto-rico news
group with respect to the current P.R. statehood legislation (disguised as P.R.
"self-determination") that passed the House by one vote and is now in
the Senate. That legislation would grease the skids to statehood and to the
extent that our news media have not blacked out news of what is going on, they
have virtually unanimously supported it. There have probably been more
editorials around the country FOR it, than there have been news items ABOUT it.
And if one were to compare the positive editorials with the truly informative
news articles or the negative editorials, it's a complete wipeout. What in the
world, the detached observer must wonder, is going on?
The zealot offered the counter-example
of The Washington Times right in our
nation's capital, which he said was opposed to the legislation.
"Well they should be," I
responded, "if they are to be the true conservative newspaper that they
claim to be," and I asked for evidence that The Times had weighed in editorially against it. The zealot could
not produce any such evidence, but he said their articles about the legislation
had had a negative tone. The fact is that The
Times has had virtually no articles, and I have heretofore detected no tone.
Now I have. Today's (July 31, 1998) front-page article, "Governor promotes
Puerto Rico as the 51st state" can only be
described as strongly pro-statehood. It also has a statement in favor of the
current sneaky legislation by Republican Senator Robert F. Bennett of Utah. If
memory serves, Sen. Bennett has a "prior" affiliation with one of our
many clandestine organizations, quite possibly the CIA.*
Please read and take to heart "CIA Plots Puerto Rico
Statehood." Here is what I think is afoot:
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