The reoccurring problem with socialism is eventually you run out of other people’s money !!

I’m not quite sure what the exact percentage is currently, but it was previously estimated more than 50% of all Puerto Ricans receive federal government subsidy (welfare) benefits of some form.  It is an unsustainable socio-economic system based on massive federal expenditures to subsidize their residents. 

Puerto Rico now saying “repayment is impossible”.  Here come the cries for bailouts from the Democrats.

(Via New York Times) Puerto Rico’s governor, saying he needs to pull the island out of a “death spiral,” has concluded that the commonwealth cannot pay its roughly $72 billion in debts, an admission that will probably have wide-reaching financial repercussions.

The governor, Alejandro García Padilla, and senior members of his staff said in an interview last week that they would probably seek significant concessions from as many as all of the island’s creditors, which could include deferring some debt payments for as long as five years or extending the timetable for repayment.

“The debt is not payable,” Mr. García Padilla said. “There is no other option. I would love to have an easier option. This is not politics, this is math.”

It is a startling admission from the governor of an island of 3.6 million people, which has piled on more municipal bond debt per capita than any American state.

A broad restructuring by Puerto Rico sets the stage for an unprecedented test of the United States municipal bond market, which cities and states rely on to pay for their most basic needs, like road construction and public hospitals.

That market has already been shaken by municipal bankruptcies in Detroit; Stockton, Calif.; and elsewhere, which undercut assumptions that local governments in the United States would always pay back their debt.  (read more)

JUNE 2011 ↓