Jack Lew: Puerto Rico is in Economic Collapse But Things Could Get Even Worse

From a letter Treasury Secretary Jack Lew sent to congressional leadership on Friday:

Although there are many ways this crisis could escalate further, it is clear that Puerto Rico is
already in the midst of an economic collapse...

Puerto Rico is already in default. It is shifting funds from one creditor to pay another and has
stopped payment altogether on several of its debts. As predicted, creditors are filing lawsuits.
The Government Development Bank, which provides critical banking and fiscal services to the
central government, only avoided depleting its liquidity by halting lending activity and sweeping
in additional deposits from other Puerto Rico governmental entities. A large debt payment of
$400 million is due on May 1, and a broader set of payments are due at the end of June.

Puerto Rico has been shut out of the municipal bond market for more than two years and ran out
of the funding sources traditionally used to finance government operations more than six months
ago. In response to the crisis...

More recently, Puerto Rico has resorted to a series of onerous and unsustainable emergency
liquidity measures, including selling assets from already depleted pension funds; borrowing from
the workers compensation and other insurance funds; and withholding hundreds of millions of
dollars in tax refunds owed to its citizens. Not only do these actions affect the most vulnerable
citizens in Puerto Rico, the unpaid obligations do not go away; they simply accumulate and make
long-term recovery even harder to achieve.
...

www.economicpolicyjournal.com...

Puerto Rico has defaulted already, and there are two due dates in May and June of this year they won't be able to pay off. Even thou the government of Puerto Rico has taken austerity measures and has even resorted to selling assets from worker's pension funds, including workers compensation, and other insurance funds, as well as withholding hundreds of millions of dollars in tax refunds owed to the people of Puerto Rico.

Puerto Rico's Treasury Secretary Jack Lew already admitted it will get worse. Could the same thing happen to the United States soon?

Many European countries are also undergoing an economic crisis which is only getting worse. Unfortunately it seems the world is headed to a total economic collapse caused by the very same people who have been offering a One World Government as a solution.

Funny this comes up...

Just ignore it because the world economy is fine. People just need to work harder and get the right educations.

There isn't any flaws in the system it's your fault!

Puerto Rico's Treasury Secretary Jack Lew already admitted it will get worse. Could the same thing happen to the United States soon?

One possible indicator;
Compare the GNP of Puerto Rico to its debt. Now do the same for the United States.

a reply to: onequestion



Please note this has nothing to do with the tens of trillions of dollars being hoarded in off shore tax shelter, This is all on those lazy good for nothing Puerto Ricans, if they would have got off their liberal lazy butts, this would never have happened. Frankly it pisses me off that they being a territory of the US of A are going bankrupt, hell we should remove their territory status, their embarrassing the US of A. /sarcasm

Maybe nations should control money, not the rothchilds banksters.

An antiquated system that has worked well for a few, has the world falling into economic chaos.

a reply to: AlaskanDad

Don't make excuses for the Peurto Ricans and try to put responsibility off on bankers.

They need to pick themselves up off their bootstraps and invent their own currency and back with it gold so they can rebuild.

Those lazy good for nothing liberals! Work harder, longer hours for less money! Then maybe we can consider helping them.

a reply to: onequestion

We both know it's a wonderful world...


...for about 1% of the people.


The others can fight for the crumbs from the tables of the rich.

a reply to: AlaskanDad

Crumbs? No we're not even worth that, that's reserved for the poodles in their 1000 dollar purses. We get to eat their refuse like a common dung beetle, it's what we deserve.

Especially those damn lazy Puerto Rican bastards.

That Hurricane (georges) back in 1998 didn't help them much either.

The agricultural sector of Puerto Rico lost over 50% of its crops and 65% of its poultry.[1] Equipment, agriculture and manufacturing losses amounted to $212.9 million a day. Damages to houses were catastrophic, with 28,005 houses completely destroyed; an additional 72,000 were partially destroyed. On the nearby island of Culebra, 74 houses were completely destroyed with 89 suffering partial damage. Schools received an estimated $20–25 million in damage. The total damage to the Puerto Rican economy was estimated at $1.907 billion.
................
Hurricane Georges caused catastrophic damage to the road system in Puerto Rico. The hurricane had affected over 7000 kilometers of roads and 2100 bridges throughout the island. Most of these effects were structural failure, signs, signal systems, and landslides. The Puerto Rico Department of Transportation and Public Works started an emergency response to clean up the roads. Over 230 teams cleaned up debris and installed four temporary bridges

Same happened in St Maarten most of the island was wiped out by a hurricane (the lagoons still have many wrecked ships in them rusting away)

Most of the Caribbean is in extreme poverty from what i have seen on my travels.

a reply to: ElectricUniverse

Anyone ever read "Confessions of an Economic Hitman"?


Who is Puerto Rico's biggest creditor? hmmm

ETA: this might help money.cnn.com...

More recently, Puerto Rico has resorted to a series of onerous and unsustainable emergency
liquidity measures, including selling assets from already depleted pension funds; borrowing from
the workers compensation and other insurance funds; and withholding hundreds of millions of
dollars in tax refunds owed to its citizens. Not only do these actions affect the most vulnerable
citizens in Puerto Rico, the unpaid obligations do not go away; they simply accumulate and make
long-term recovery even harder to achieve.

Good example of how failed governments operate against their own population.

Wake-up call because this is an American Territory.

Get ready.

I won't comment on the political system there.

Yea Puerto Rico is hurting in a bad way. Doesn't look like they will be able to make some crucial bond payments as it is, so some of those bond holders may get the "shrug while holding open your pockets open" gesture.

Here is Reuters with more

UPDATE 1-Puerto Rico 'very unlikely' to avoid Jan.1 default - governor