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Mon May 16, 2016, 03:17 PM

Puerto Rico's Debt

Meanwhile, the island's 3.4 million residents face a crushing combination of economic meltdown and government dysfunction.

Puerto Rico's debt crisis: Made in the USA
Puerto Rico needs debt relief as it struggles to contain an unfolding economic and social crisis. But its creditors want to tighten the screws, explains Eric Ruder.
May 16, 2016

THIS WEEK will be a crucial one in the battle over the debt crisis strangling Puerto Rico. The U.S. Supreme Court and Congress are both wading into the political and legal clash over a multibillion-dollar debt that is, in the words of the New York Times, "not payable."

On one side stand the institutions that loaned the island nation billions of dollars because Puerto Rico's bonds paid better returns than other municipal issues and were tax-exempt for U.S. investors. These creditors, a collection of Wall Street hedge-fund managers and vulture capitalists, want to use U.S. laws and courts to force Puerto Rico to repay every last penny of its debt burden, no matter the economic and social consequences.

They are counting on the U.S. government not to grant any form of debt relief for Puerto Rico, since the commonwealth, as it is officially designated, is legally barred from filing for bankruptcy like U.S. cities. That's why some hedge funds took on even more of Puerto Rico's debt recently, figuring that they could buy it for pennies on the dollar and use their political connections and various legal levers to make a windfall.

On the other side are the people of Puerto Rico, who for the last decade have endured a steady deterioration of their economy and living conditions ...

Much more here: https://socialistworker.org/2016/05/16/puerto-ricos-debt-crisis-was-made-in-usa

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