If you have ever looked deeply into what created the financial pension crisis in Puerto Rico you’d have to admit the potential for a federal bailout is beyond absurd. But that won’t stop the insufferable liberals from proposing such a possibility – and watch closely as House Speaker Paul Ryan begins to discuss the “outcome for the bond-holders”.
Former presidential candidate Marco Rubio already stated he was in favor of a bailout, albeit with conditions; and we know the Democrats will always look to gain political leverage through the advocacy of the fiscally stupid….
NEW YORK — Over a dozen activists descended on a building where Federal Reserve chair Janet Yellen and her three living predecessors were speaking on Thursday to demand that the Fed bail out Puerto Rico’s cash-strapped government.
The demonstrators, who are affiliated with the progressive Fed Up coalition, distributed Puerto Rican flags and empanadas as Puerto Rican music played outside Manhattan’s International House, a student residence. Yellen was there for an extremely rare panel discussion alongside past Fed chairs Ben Bernanke, Paul Volcker and Alan Greenspan, who participated via videostream.
The activists were joined by Puerto Rican lawmaker Manuel Natal, who was in town to participate in a panel discussion hosted by City Council Speaker Melissa Mark-Viverito on Friday.
“They have two mechanisms under their authority to help Puerto Rico: one is to provide a bailout to Puerto Rico similar to the one they did to banks, the same banks that are now in Puerto Rico making a fortune out of our fiscal situation,” Natal said. “And the second would be to buy our debt” and charge Puerto Rico interest rates that are lower than the market would offer.
The activists claim that since the Fed had the authority to buy trillions of dollars of bad debt from Wall Street banks after the 2008 financial crisis, it can do the same for the debt of Puerto Rico. (read more)
[…] Today, TRS and the other main pension fund, the Employees Retirement System (ERS), together covering about 330,000 workers and retirees, are virtually penniless. Their combined unfunded liability totals $43.2 billion. With about $1.8 billion in assets to pay $45 billion in liabilities, the 96 percent combined shortfall is among the biggest of any U.S. state pension this century, and probably the biggest ever for pensions “of this size and scale,” said Keith Brainard, research director at the National Association of State Retirement Administrators.
[…] Last December, creditors griped privately when Puerto Rico doled out about $120 million of the bonuses even as it missed some minor bond payments.
Christmas and medication bonuses, ad hoc cost-of-living adjustments, death benefits and other perks were expanded periodically throughout the 1980s, ’90s and 2000s. These now account for nearly $3 billion in liabilities, according to Milliman’s latest actuarial report, even after reductions under the 2013 reforms.
Rafael Hernandez Colon, president of the Puerto Rico Senate during Ferre’s administration, said his party went along with the Christmas bonuses “for political reasons” to avoid being labeled obstructionist, but did not consider it good governance. “We looked at it as giving candy to children,” Hernandez Colon said in an interview at his foundation in Ponce, a city on Puerto Rico’s southern coast.
Here’s a generally good outline detailing the historic problems that are systemic within the Puerto Rican financial problem. – SEE HERE –