Puerto Rico Declares Bankruptcy

[August1991]

THE government of Puerto Rico said in 2015 that the island could not pay its debts. Yet it was only on May 3rd that it kicked off the biggest bankruptcy case in America’s history. Public-sector debts total almost $74bn (around 100% of GNP). The drawn-out fiscal crisis has both imperilled Puerto Rico’s economy and upended the island’s politics.

The Economist

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In very practical terms, when a government declares bankruptcy then it has simply turned bondholders into taxpayers.

Bondholders expect to be repaid; taxpayers at most hope for some benefit.

In a society where 30% of voters pay no taxes at all, who would buy a State bond? Is such a society sustainable?

[Hydraboss]

13 hours ago, August1991 said:

In a society where 30% of voters pay no taxes at all

You mean like Canada?  I have no idea why anyone would by government issued bonds, especially if the government has a track record of being fiscally irresponsible.

 

Like Canada since 2015.

[ZenOps]

As an unincorporated territory or simple US commonwealth member, they can't declare bankruptcy.

At most, they can declare insolvency.  Bankruptcy assumes automatic debt forgiveness, which they do not have.  Puerto Rico could technically be required to garnish wages and recind pensions until the amount is paid in full.  It would be a nasty thing to do, but such is the price of colonialism.

Edited May 9, 2017 by ZenOps

[August1991]

On 5/9/2017 at 1:05 PM, ZenOps said:

As an unincorporated territory or simple US commonwealth member, they can't declare bankruptcy.

At most, they can declare insolvency.  Bankruptcy assumes automatic debt forgiveness, which they do not have.  Puerto Rico could technically be required to garnish wages and recind pensions until the amount is paid in full.  It would be a nasty thing to do, but such is the price of colonialism.

Insolvency, bankruptcy. ZenOps, somebody holds these COFINA and unless I am wrong, the bondholders are now taxpayers.

[-TSS-]

For Puerto Ricans keeping things as they are is still the better alternative than the other two; becoming a sovereign country or becoming a full US-state.

[-TSS-]

I spotted a news-headline saying that Puerto-Ricans voted overwhelmingly in a referendum to seek US-statehood. That's interesting. What does the US-constitution say about accepting a new state?

[hot enough]

And not a word from any kind soul as to how Puerto Rico got to where it is. 

 

Quote

 

A Century Later

 

Cuba , the Caribbean, and Latin America

 

by Noam Chomsky

 

Peace Review, September, 1998

 

(http://www.chomsky.info/articles/199809--.htm)

 

 

Norman Graebner opens a major review of U.S. diplomatic history with the observation that "1898 was a turning point in the history of the Republic." For a century, Americans had, as Thomas Bailey wrote in 1969, "concentrated on the task of felling trees and Indians and of rounding out their natural boundaries." By the century's end the U.S. had become by far the greatest economy in the world, though not yet a major actor in the international arena. The year 1898 indeed marked a turning point in that regard.

Ten years before, Secretary of State James Blaine had observed that "there are only three places that are of value enough to be taken. One is Hawaii. The others are Cuba and Puerto Rico." Shortly after, the United States Minister informed Washington that "[t]he Hawaiian pear is now fully ripe and this is the golden hour for the United States to pluck it." In July 1898, troops imposed martial law followed by formal annexation. Celebrating their victory over the indigenous population, a journal of the American planters proclaimed Hawaii to be "The First Outpost of a Greater America."

Seventy years earlier, John Quincy Adams had described Cuba as a "ripe fruit" that would fall into U.S. hands once the British deterrent was removed. By 1898, Cubans had effectively won their war of liberation against Spain, threatening "more than colonial rule and traditional property relations," historian Louis Perez notes, adding that "Cubans also endangered the United States' aspiration to sovereignty." Cuban independence had been "anathema to all North American policymakers since Thomas Jefferson."

In 1898, McKinley averted the disaster by invading Cuba, a war, Perez states, "ostensibly against Spain, but in fact against Cubans" -- the Spanish-American war in standard doctrine. Historians Ernest May and Philip Zelikow, in The Kennedy Tapes, remark that until 1959 Cuba remained "a virtual colony of the United States." The fanaticism of the Cuba policies of successive administrations, starting with Eisenhower, cannot be understood without recognition of their historical depth.

Even before invading Cuba, McKinley had moved to liberate the Philippines -- soon liberating hundreds of thousands of souls from life's sorrows. The press of the time remarked that "slaughtering the natives in English fashion" would allow "the misguided creatures" who resist us to "respect our arms" and ultimately recognize that we wish them "liberty" and "happiness."

A more sophisticated version was articulated by sociologist Franklin Henry Giddings, who argued that "if in later years, [the conquered people] see and admit that the disputed relation was for the highest interest, it may be reasonably held that authority has been imposed with the consent of the governed." This doctrine of "consent without consent," has respectable origins in British moral philosophy and captures a good part of the operative content of "consent of the governed," however obtained.

The third "place of value," Puerto Rico, was taken over in 1898 as well, and also remained a "virtual colony," though in different form than the others. Puerto Rican independence fighters were kept out of the capital city so that Spain's surrender would be, unambiguously, to the new rulers. Puerto Rico was turned into a plantation for U.S. agribusiness, later an export platform for taxpayer-subsidized U.S. corporations, and the site of major U.S. military bases and petroleum refineries.

 

http://www.thirdworldtraveler.com/Chomsky/Century_Later_Cuba.html

 

[cannuck]

Gee, I am sorry I missed this thread, glad I finally noticed it.

When making presentations to Senate hearings of the USVI, we pointed out the exact problem that they have relative to Puerto Rico.  In that case, the last election was bought by Hess to dump PDVSA and their environmental obligations related to the Hovensa refinery.   USVI is far worse off relative to Puerto Rico on a per-capita basis, and with no resources to plunder (as is case with Canada - as someone asked why we can float debt).   The reason that PR wants statehood is simply financial.