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Breaking News
Puerto Rico Has Defaulted

It’s all over the wires: Puerto Rico has defaulted on its $58 million payment to creditors of its Public Finance Corporation, which was due by the end of day. San Juan’s treasury only managed to scrape together some $628,000 towards the total. The government had tried to argue that the PFC bonds were of a different category—and had a different legal status—than general obligation debt. Credit rating agencies rejected the argument. “Moody’s views this event as a default”, Moody’s analyst Emily Raimes said in a statement, according to Reuters. “This is a first in what we believe will be broad defaults on commonwealth debt.”

What now? A whole lot of mess, more than likely. WRM wrote at length on Friday about what needs to happen next, in case you missed it. The kicker from his piece:

The United States faces some serious issues as the 2016 election cycle begins; the blue model meltdown is bigger and in its way more toxic than anything that happened at Chernobyl. Reporters and voters should be asking candidates what they plan to do about it.

The Republican debates start this week. We hope the fourth estate will be rising to the occasion.

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  • Fred

    We hope the fourth estate will be rising to the occasion.

    Yeah, good luck with that.

    • Andrew Allison

      You took the words out of my mouth. What we can expect is demands for a federal government bail-out, via enabling bankruptcy or the taxpayer.

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    • CapitalHawk

      No doubt. I’m sure they will be asking the important questions of the Republicans like “Why do you hate women?” and “Why do you support cops killing innocent black men?”

  • Boritz

    “Reporters and voters should be asking candidates what they plan to do about it.”

    The reporters will be asking Hillary “Do you think you are too compassionate at times?” and he voters will be asking “What are you going to give me for free?”

  • Pete

    Puerto Rico borrowed copious about of money and then promptly squandered it by going on a government hiring binge and over compensating those in government employee.

    On the island, many, many government jobs were in reality a form of high price welfare and payback for political support.

    One of the root problems of P.R. is that it looked at the U.S. and tried to ape our standard of living without bothering to work & produce what it takes to live that way. (This is similar to the Geeks as looked to wealthy Europe and figured they deserved to live that way, too.)

    So P.R. tried to borrow its way to prosperity. Fools.

    And to think many in P.R have the nerve to push for statehood. God forbid!

    • Andrew Allison

      I’m broadly in agreement but, to be fair, the US has contributed to the problem by making PR bonds double tax-free (and thus borrowing easy), and by imposing US standards like the minimum wage on a third-world entity. The people who bought PR bonds were foolishly greedy, and should pay the price. Under no circumstances should there be a US taxpayer funded bailout (which, incidentally, statehood would inevitably result in).

      • Pete

        “Under no circumstances should there be a US taxpayer funded bailout ”

        I absolutely agree.

    • William Ockham

      Edit before you send.

  • m00tpoint

    “Puerto Rico has defaulted.” Don’t worry. Can’t happen here.

    m00tpoint, in Chicago, IL

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