Bankruptcy Is Wrong For Puerto Rico
Conservatives have long argued that out of control government spending will have dire consequences in the future. Thanks to politicians following liberal economic theories, the American territory of Puerto Rico appears to be proving them correct. With the bill come due, Washington should not declare bankruptcy as a way to bail out Puerto Rican politicians who have run the Commonwealth into the poor house.
Take one look at the balance sheet and you can see that American taxpayers and banks who loaned money to the Commonwealth should not pay for the mistakes of politicians who followed policies that failed. The island of three million inhabitants has wracked up over $70 billion in debt! Over half the population works for the government. Economic policies have kept wages artificially high and corporate interests have been driven out of the island to find friendlier government policies. According to new data shared by Governor Alejandro Garcia Padilla’s administration this past Monday, the commonwealth won’t be able to make $23.9 billion in debt payments throughout the next decade.
The solution that is being pushed by the left is to bailout the island without forcing radical reforms that will shrink government and provide a friendlier business atmosphere. The White House and politicians on the island have rejected government reforms and are looking for Washington to provide them a bailout. They want Congress to enact legislation allowing them to declare bankruptcy to escape from their debt obligations. In this case, bankruptcy is the functional equivalent of a bailout. Such a move would forestall needed economic reforms and set a dangerous precedent for other municipalities and states dealing with their own spending issues. The precedent of following the recommendation of the Obama Administration will be felt well beyond San Juan.
Bankruptcy Is Wrong For Puerto Rico
Take one look at the balance sheet and you can see that American taxpayers and banks who loaned money to the Commonwealth should not pay for the mistakes of politicians who followed policies that failed. The island of three million inhabitants has wracked up over $70 billion in debt! Over half the population works for the government. Economic policies have kept wages artificially high and corporate interests have been driven out of the island to find friendlier government policies. According to new data shared by Governor Alejandro Garcia Padilla’s administration this past Monday, the commonwealth won’t be able to make $23.9 billion in debt payments throughout the next decade.
The solution that is being pushed by the left is to bailout the island without forcing radical reforms that will shrink government and provide a friendlier business atmosphere. The White House and politicians on the island have rejected government reforms and are looking for Washington to provide them a bailout. They want Congress to enact legislation allowing them to declare bankruptcy to escape from their debt obligations. In this case, bankruptcy is the functional equivalent of a bailout. Such a move would forestall needed economic reforms and set a dangerous precedent for other municipalities and states dealing with their own spending issues. The precedent of following the recommendation of the Obama Administration will be felt well beyond San Juan.
Bankruptcy Is Wrong For Puerto Rico
posted by Zo Heri at 6:23 AM
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