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Blue Model Blowup
Treasury Dept. Plays Tricks with Puerto Rico Debt
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  • Boritz

    ‘We cannot bail out the “nice” claimants and punish the “bad” ones ‘

    They already went down this road with General Motors. Modern D.C. has no function more dear to it than picking who wins and who loses. What else is politics for?

    • MikePM

      There is no greater purpose in life for a communist than to reward his friends and destroy his enemies.

    • mikekelley10

      “Nice” is lefty code for corrupt.

      • klgmac

        Or “campaign contributor”.

  • Jim__L

    “We can’t close the schools to pay pensions to retired teachers.”

    This is factually incorrect. It is an aspiration, a value judgement, not an absolute.

    This crisis calls into question not just the “blue model”, but the whole feasibility of looking to government to solve these problems.

    It certainly calls into question the Progressive idea of ever-increasing State largesse to ever-increasing segments of the population. This point came home 20 years ago when Bill Clinton said “the era of big government is over”. It seems we have to re-learn it anew each generation.

  • Anthony

    The gist WRM: “it isn’t so simple.” At this point, here we are!

  • Andrew Allison

    This message to government employees and retirees that their pensions trump general obligation the latest manifestation of our increasingly politicized Executive Branch.

  • Dale Fayda

    Social Democracy in collapse. Love it!

  • Fat_Man

    “to decide which group of debt holders is most ‘morally worthy'”

    That is easy. If they vote Democrat, they are worthy, if they don’t they are not.

  • Blackbeard

    At the end of this road the municipal finance market will be wrecked and everything local government does will be more expensive. The New York Times, CNN and NPR will tell us this is all the fault of heartless, greedy Republicans.

  • mikekelley10

    In related news:

    –After putting a long-expected bond sale on hold last week, Chicago Public Schools managed to borrow $725 million Wednesday by promising investors extraordinarily high interest rates.

    Bonds issued by taxing bodies like CPS are normally considered sound investments, but that’s not the case with a school district weighed down by debt, labor uncertainty and political tumult, one market analyst said.

    “This is not a typical municipal bond,” said Matt Fabian, a partner at Concord, Mass.-based Municipal Market Analytics. “You can’t go into it assuming that you know what’s going to happen or that you will almost surely get your money back. There is a large degree of speculation.”

    Documents released early Wednesday afternoon show CPS sold 28-year bonds at yields of 8.5 percent. Before the district pulled its bond issue last week, it was offering 25-year bonds at 7.75 percent. By comparison, when the state of Illinois sold bonds earlier this month, yields were 4.27 percent for 25-year bonds.–

    Buyers of bonds would be wise to expect very high rates to loan their money to these corrupt, blue-state institutions.

    • White Knight Leo

      Didn’t I also read that they failed to sell all the bonds by the deadline? That they were trying to sell more like 790 and 725 is what they managed to get people to buy?

      • mikekelley10

        You sure can’t blame investors for being a little jumpy with all the corruption and over-spending. California and Illinois are perfect examples of what happens when you elect mostly Democrats. Californians brag that they “balanced their budget”, but they conveniently forget hundreds of billions in pension and health care expenses that they are on the hook for.

        • White Knight Leo

          No, not at all. I was just remembering that I had read something about this before seeing it here, and what I saw said that they failed to sell all the bonds even at the higher interest rate.

  • Galileo2

    States’ fiscal matters are entirely a matter of their own Sovereignty. PR isn’t a State, so Congress can intervene. But California and NY going under can’t be forced into bankruptcy and certainly not against their will even if Congress amends the Bankruptcy code to allow it, just like individuals can’t be forced into bankruptcy but rather just default and deal with those consequences instead.

    Back to PR. Obama & Cronies can kick this can down the road all they want. But if a Rep wins the WH, those games will end and PR will be left to twist in the wind. If it’s Trump in the WH, he’ll probably sell the island to Cuba for $10 and call it a great deal for America.

  • klgmac

    America is no longer a nation of laws. The government killed that concept. Too bad so much good was premised on that being true.

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