Gonzalez: Puerto Rico should default to shock U.S. financial market

NEW YORK DAILY NEWS

BY Juan González

Juan González is a broadcast journalist and investigative reporter. He is also a columnist for the New York Daily News since 1987. He frequently co-hosts the radio and television program Democracy Now! with Amy Goodman.

Juan González is a broadcast journalist and investigative reporter. He is also a columnist for the New York Daily News since 1987. He frequently co-hosts the radio and television program Democracy Now! with Amy Goodman.

House Speaker Paul Ryan tried this week to paper over the decision by Congress to turn its back on Puerto Rico’s debt crisis.

“I am instructing our House committees of jurisdiction to work with the Puerto Rican government to come up with a responsible solution by the end of the first quarter of next year,” Ryan said Wednesday.

He issued that declaration only hours after GOP leaders in the House and Senate blocked a proposal by the White House; by Puerto Rico’s governor, Alejandro Garcia Padilla, and by Democrats to grant the island territory authority to restructure its massive $72 billion debt through bankruptcy laws — as part of the federal omnibus spending bill.

March or April will be too late for Puerto Rico, which is facing a nearly $1 billion debt payment Jan. 1.

“Hedge funds proved more persuasive over Congress than the well-being of 3.5 million American citizens living in Puerto Rico,” Garcia Padilla said in an emotional speech at the National Press Club.

GONZALEZ: TOP REPUBLICANS REJECT FEDERAL AID TO PUERTO RICO

The governor was referring to the hedge funds and other municipal bond investors that have lobbied fiercely to stop a court-monitored restructuring of the island’s debt.

“We have no cash to pay, and we will default; that’s a fact,” Garcia Padilla warned.

If so, it would be the biggest municipal bond default in U.S. history.

The governor, who announced he will not seek reelection, insisted he has already tried all austerity measures and tax increases his population can withstand, without dismantling essential services.

“If they make me choose between Puerto Ricans and creditors, I will choose Puerto Ricans,” he said.

GONZALEZ: PUERTO RICO DEBT AID DEPENDS ON A DEAL IN D.C.

The dimensions of the humanitarian crisis that has engulfed the island continues to be ignored by many in Washington.

Already the poorest place under the U.S. flag, Puerto Rico still has more than 11% unemployment. It has lost 10% of its population in the past decade, with some 85,000 people fleeing in 2014, most of them to the United States.

On Wednesday, the commonwealth’s government canceled the small $300 annual Christmas bonuses its unionized employees are supposed to receive as part of their labor contracts, and the island’s biggest public university announced it can no longer pay any vendors, and may not be able to meet its next payroll.

A minor increase in health care funding for Puerto Rico that Congress approved in the omnibus bill — $900 million spread over 10 years — won’t dent the island’s huge debt, the governor said.

Republicans in Congress want us to believe that sometime next year, during the frenzy of a presidential election season, they just might address the island’s financial meltdown.

Two things must happen fast: Puerto Rico should go ahead and default on Jan. 1 and send a shock through the country’s financial markets.

And the 5 million Puerto Ricans in this country should insist all presidential hopefuls take a stand on the crisis.

Washington and Wall Street, after all, don’t respect those who beg for help. They only react to crisis and pressure.

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