Puerto Rico's governor is warning that the island can't pay its $72 billion public debt, delivering another jolt to the recession-gripped US territory as well as a world financial system already worrying over Greece's collapsing finances.
Gov. Alejandro García Padilla is hoping to defer debt payments while negotiating with creditors, spokesman Jesus Manuel Ortiz said Sunday night.
"There is no other option," García said, according to The New York Times. "I would love to have an easier option. This is not politics; this is math."
The comments came as legislators debate a $9.8 billion budget that calls for $674 million in cuts and sets aside $1.5 billion to help pay off the debt. The budget has to be approved by Tuesday.
Puerto Rico's bonds were popular with US mutual funds because they were tax-free, but hedge funds and distressed-debt buyers began stepping in to buy up debt as the island's economy worsened and its credit rating dropped.
"Analysts believe the central government will run out of cash as soon as July, which could lead to a government shutdown, employee furloughs, and other emergency measures," according to The Wall Street Journal.
"This is going to be painful for the next two to three years," Rep. Pedro Pierluisi, Puerto Rico's Democratic representative in the US House, told The Journal.
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6 comments:
"This is not politics; this is math"
Yes, but it was politics that put PR in this financial shortcoming. Using math, you don't spend more money than you have.
Well here we go, another hole to plug. Administration should use the $29 million that they are fast tracking to victims of the shooting down south. Some more of Tax Payers money being used for Vote getting.
And soon they will be coming in bigger numbers as well.
Statehood would put them right on par with the rest of the
government-teat-sucking communities...DC, Detroit, Baltimore....
Maybe we should just write them off as a bad investment!
What do we get from them as a positive nowadays - they don't want us using Roosevelt Roads as a navy training base any more!?
Why not sell off Porto Rico, who needs it or them.
Oh there is! Just how much debt has our lying, cowardly kenyan king accumulated and isn't more than all other past presidents combined??
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