Believing in Puerto Rico will Require Relentless Optimism
For years, Puerto Rico borrowed to offset falling revenues as its economy and population declined. This was never sustainable, and now the moment of reckoning has arrived.
Category: Puerto Rico
U.S. House Approves Package for Puerto Rico Debt Crisis
In a 297-127 vote, the U.S. House passed a bill that helps Puerto Rico manage its debt crisis, according to NPR. Puerto Rico is $70 billion in debt and is expected to miss a July 1 payment. Under federal law, Puerto Rico is prohibited from using bankruptcy to restructure its debt.
There were Warnings about Puerto Rico
To almost no one’s surprise, Puerto Rico missed a US$422 million debt payment earlier this month, triggering fears among investors that additional defaults are on the way and increasing pressure on Congress to act.
Puerto Rico Presses for Debt Relief as Economy Unravels
Secretary of the Treasury Jacob Lew will meet with Puerto Rican officials on Wednesday to address the island’s mounting debt crisis. Puerto Rico has defaulted twice on its payments and it suffers with a high public debt of $72 billion, and the secretary hopes that the U.S. Congress will act by March of this year. The commonwealth’s deficit expects to stretch from $14 billion to $16 billion in the coming five years.
Puerto Rico Governor Petitions Congress for Bankruptcy
Governor Alejandro Garcia Padilla begged the U.S. congress to pass a law allowing the territory to file bankruptcy, according to AFP. Puerto Rico owes more than $70 billion to creditors, and the governor maintains that bankruptcy will prove necessary to restructure bonds and avert political instability.
The governor urges Congress to permit the Caribbean island to file bankruptcy by the end of December, but President Obama and members of Congress remain resistant to the idea. The government concedes that Puerto Rico is in for another lost decade if the status quo continues.
Puerto Rico Suffers from High Living Costs and a Bad Economy
According to a recent report from Puerto Rico’s Institute of Statistics, groceries are 21 percent more expensive than the United States, according to The Guardian. The cost of living is also 13-percent higher than many urban areas in the United States. The commonwealth’s high living costs does not bode well for an economy that cannot pay off its debts and is on the verge of bankruptcy. The economy is $72 billion in debt, and the governor has stated that the debt is not repayable.
Problems with Puerto Rican Debt Cause Mass Exodus, Exacerbate Problems
Puerto Rico, a Spanish-speaking US territorial island in the Caribbean has an unusual dilemma. Its economy has performed remarkably poorly, causing Puerto Rican citizens to leave the country to seek better opportunities. Yet, those very same movements off the island reduce the territory’s tax base, worsening its debt problems.
As a result, Puerto Rico finds itself is on the brink of default, with its own population contributing to the problem by leaving. For years, the Puerto Rican economy has deteriorated. Much of the problem flows from poor debt management.
New York Unveils $20bn Plan Create Storm-Proof City
New York’s mayor Michael Bloomberg has unveiled plans for the city to defend itself against future storms and dangers posed by climate change, recommending the construction of anti-flood fortifications including removable floodwalls, levees and sand-dunes in low-lying areas across the city.
Puerto Rico Economic Forecast
Of countries in the Caribbean region, Puerto Rico is considered as one of the most diverse. While the agriculture sector has been important to this country’s economy, today both the services and industrial sectors are considered the key to a strong economic position. In addition, Puerto Rico’s economy does well because of tax incentives and duty free access to the United States and heavy foreign investment from companies in the United States.
