Posted on 07/13/2014 6:10:27 PM PDT by markomalley
Municipal bond mutual fund investors are panicking this weekend after the U.S. Commonwealth of Puerto Rico’s Legislature passed a new law allowing public agencies to default on their debt.
Although part of the United States, Puerto Rico in the 1990s made Spanish the official language and now about 86% of the island does not speak English in the home. Democrat Governor Alejandro Garcia Padilla, who has difficulty speaking English, told Bloomberg News last year that Puerto Rico had a constitutional and moral obligation to not default on the island’s $73 billion of debt. But he just passed a law giving local court proceedings the power to cancel much all of the island’s bond debt.
Puerto Rico is the poster-child for multiculturalism with both Spanish and English as the official languages. US officials pushed for many years to make English the dominant language, but in 1991 the Puerto Rican legislature issued a bill making Spanish the official language in school and government use. The decision was reversed by a federal court in 1993, but the Democrat Party that has dominated politics for 100 years demanded that schools continue to shun English. Today only 1 in 8 families speak English as the primary language in the home.
Puerto Rico economy is now shrinking at a 6% annual pace and only 1.2 million, or 32%, of the island’s 3.7 million of the inhabitants employed. Among Puerto Ricans working full time, surveys reveal that 96.6% say Spanish is their first language, and 98.5% indicated that they are fluent in Spanish.
Because of its horrible economic fundamentals, the island’s high yield bonds have been a magnet for mutual fund investors, which hold at least $12 billion of the island’s debt.
Some politicians have argued that Puerto Rico needs to more fully adopt English…
(Excerpt) Read more at breitbart.com ...
Easy, big banks will loan to anyone because they know the taxpayers will be forced to bail them out to “save the economy”.
Puerto Rico had a great governor recently, but the voters kicked him out in favor of a politician who promised them more free stuff.
Smaller Islands are notorious for having low resources and high costs, including energy, travel times, travel costs, etc, which ten to make them poor. Puerto Rico is better than a lot of islands, but some issues could not be worked around until recently. Air travel, container ships, and fiber internet connections all bring the island much closer to the mainland than it has ever been. It is now a four hour flight to New York.
The US federal government also gave them a boost, when they unfortunately passed FATCA. This prevents ordinary Americans from being able to move money offshore. But we can move it to Puerto Rico, and enjoy some of the same benefits.
I think they are committed to the right strategy, and hope they succeed at it.
Hope springs eternal!
sooo, still interested in making this basket case our next state???
Can you say wworthless pathetic welfare drain??
Democrats first Balkanize a place and then eat it from the inside out.
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