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[Lime]

Puerto Rico will get a loan of $4.9 billion out of that same pot, money to be used for maintaining basic government operations. President Donald Trump had previously requested that amount in loan form. With practically no tax receipts collected since last month’s hurricane destroyed the island — 85 percent of homes remain without power three weeks after the storm — Puerto Rico faces a cash-flow crisis. Officials estimate that the government could run out of money and have to shut down on October 31.

This is critical for Puerto Rico, which has had trouble borrowing from private credit markets because of its existing $74 billion debt. But instead of replenishing the coffers with a grant, this is a loan — one Puerto Rico will also need to repay.

The island will get an additional $150 million loan to cover its matching funds for FEMA grants. Cities and states are required to put a small amount of money into sharing costs for disaster relief. That brings the total of loans to the island up to $5.05 billion. The appropriations committee allotted another $29 million for administrative expenses for the loan.

The bill includes a provision enabling the Department of Homeland Security and the Treasury Department to decide to cancel the loan, but that’s no guarantee. And those two agencies set the terms of repayment; while news reports have described a “low-interest” loan, there’s no set interest rate in the text of the bill.

The House will vote on the bill this week, and the Senate is likely to follow next week. The bill is in line with White House requests for disaster aid and bridge funding for Puerto Rico, so Trump would likely sign it.

Meanwhile, activist groups have turned their focus to Puerto Rico, with environmental groups demanding mass debt relief from Congress and teaming up with community organizations for a national day of action.

https://theintercept.com/2017/10/11...s-16-billion-in-debt-but-not-for-puerto-rico/

And even Nancy Pelosi thinks this is a good idea and she does not understand why this is predatory on a vulnerable US colony

 

[ElectricBlanketFire]

 

[BlueTsunami]

Go in further debt yet your coast is also closed to anything else but our vessels. The spitroasting of a devastated island.

 

[The Culture Vulture]

Surprised the island doesn't have a "for sale" sign on it the way Trump hates that place.

 

[Trojita]

Puerto Rico can't do one thing Trump does.

Spoiler

Declare Bankruptcy

 

[NH Apache]

Go in further debt yet your coast is also closed to anything else but our vessels. The spitroasting of a devastated island.

The coast is open to all vessels.

 

[Morat]

Disaster capitalism

 

[weekev]

One and done. Deplorable

 

[#sorrynotsorry]

National debt doesn’t work the same way as personal debt. A fact that changes the nature of this entirely.

 

[Brinbe]

Gross

 

[Foffy]

Is Puerto Rico America's version of Greece?

 

[Oriel]

They'd honestly be better off getting out of the rotten United States altogether and trying their luck with international donors.

 

[weekev]

Is Puerto Rico America's version of Greece?

No because Greece’s crisis wasn’t caused by a big fuck off hurricane. Puerto Rico has the 1-2 punch of being in line to be hit by huge disasters and a racist POS who hates Hispanic people as president.

 

[N7 MRP Weasel]

What's going on? Seriously how can anyone look at this and say

"yeah dude Nah, that's a great idea"

The disconnect between upper echelon elected officials and everyday Americans is fucking real

 

[bionic77]

Did some hot Puerto Rican woman reject Trump in the past or is this part of the new racist America?

Hard to untangle the man from the country sometimes...

 

[Skellig Gra]

Is Puerto Rico America's version of Greece?

Same level of being broke but for massively different reasons.

 

[Foffy]

No because Greece's crisis wasn't caused by a big fuck off hurricane. Puerto Rico has the 1-2 punch of being in line to be hit by huge disasters and a racist POS who hates Hispanic people as president.

I meant more in it being an example of an austerity zone. Their infrastructure seemed to be of issue before the hurricane largely took it out.

 

[Saya]

Did some hot Puerto Rican woman reject Trump in the past or is this part of the new racist America?

Hard to untangle the man from the country sometimes...

His golfclub in Puerto Rico went bankrupt.

 

[DirgeExtinction]

"Let's help PR by adding more to their national debt."

 

[whatsinaname]

They need to air drop some bootstraps too.

 

[tokkun]

The issue is more complicated than it is being portrayed here. The concern is that because PR has a huge amount of outstanding debt from private equity markets that simply giving them the money is de facto giving the money to these private equity holders. And in fact, a lot of those are billionaires who bought up discounted bonds. That is what Pelosi is referring to in her quote.

 

[bionic77]

His golfclub in Puerto Rico went bankrupt.

Figures.

God we must be one of the stupidest countries of all time to make it possible for a shit head like this to be our president.

 

[DietRob]

I assume that TX, LA, and FL are also getting 'loans' that they must pay back too, right?

Surely it's not just a thing for PR because they are brown, right?

*spits in disgust*

 

[NH Apache]

I assume that TX, LA, and FL are also getting 'loans' that they must pay back too, right?

Surely it's not just a thing for PR because they are brown, right?

*spits in disgust*

Last I checked, LA was denied assistance multiple times even though cities in the western part we're destroyed by Harvey. LA has a blue governor.

 

[weekev]

I meant more in it being an example of an austerity zone. Their infrastructure seemed to be of issue before the hurricane largely took it out.

Ah yeah in that case it’s similar. Both appear to have been mismanaged at government level and now they have debts that can’t be related. Certainly seems to be a pretty complex situation, you don’t want any aid efforts ending up in the pockets of the islands creditors. Well not any more than they were already owed.

 

[trembli0s]

The issue is more complicated than it is being portrayed here. The concern is that because PR has a huge amount of outstanding debt from private equity markets that simply giving them the money is de facto giving the money to these private equity holders. And in fact, a lot of those are billionaires who bought up discounted bonds. That is what Pelosi is referring to in her quote.

Would be nice if people read this before spewing hot takes everywhere.

 

[Tal Shiar Agent]

The right thing to do would be to rush Puerto Rico statehood through so it is eligible for all of the grants and aid that states are, along with receiving foreign ships.

 

[WaterAstro]

"We loaned these lazy Pue~to Ricans in hopes that they will actually start working to pay us back."

 

[Damaniel]

The right thing to do would be to rush Puerto Rico statehood through so it is eligible for all of the grants and aid that states are, along with receiving foreign ships.

'But that would add 2 Democrats to the Senate! We can't have that!' - spineless, selfish Republicans.

I guess we can add 'ruining Puerto Rico' to Trump's (hopefully short, hopefully pathetic) legacy.

 

[Ricky_R]

Go in further debt yet your coast is also closed to anything else but our vessels. The spitroasting of a devastated island.

Vessels from anywhere in the world can come to Puerto Rico, but most come from the US, and those vessels must be theirs.

At the end of the day, the cabotage law limits us financially.

 

[NH Apache]

The right thing to do would be to rush Puerto Rico statehood through so it is eligible for all of the grants and aid that states are, along with receiving foreign ships.

This is a huge misconception. They can absolutely receive foreign flagged vessels.

 

[Beartruck]

Did some hot Puerto Rican woman reject Trump in the past or is this part of the new racist America?

Hard to untangle the man from the country sometimes...

Puerto rico voted for Rubio and not Trump in the primaries. Thats probably part of it.

 

[tokkun]

Here's a different article, also from The Intercept, that helps make it clear why we might not want to bail out Puerto Rico's debt holders.

https://theintercept.com/2017/10/03...-of-the-largest-holders-of-puerto-rican-debt/

The Baupost Group, a Boston-based hedge fund managed by billionaire Seth Klarman, owns nearly $1 billion of Puerto Rican debt, purchased under a shell company subsidiary and hidden from public scrutiny. Baupost acquired the debt through an on-paper Delaware-based corporation named Decagon Holdings LLC, whose beneficial owner had been unknown until now.

“The Baupost Group is a holder of COFINA bonds through the Decagon entities,” said Baupost spokesperson Diana DeSocio. “Baupost regularly makes investments through subsidiary holding entities.” She added that Klarman, one of the richest hedge fund managers in the world, did not hold any Puerto Rican debt individually.

Though the island, currently recovering from a catastrophic hurricane, has been mired in a borrowing crisis for years, it’s difficult to get precise information about the creditors. Many of them scooped up bonds on the cheap, seeking an astronomical payout by forcing the island to pay them back at par (or 100 cents on the dollar). This has led to widespread suffering, as punishing austerity has been imposed to encourage Puerto Rico to pay back the bondholders in full. (Only now has some of this austerity been lifted in the wake of Hurricane Maria.)

Using shell companies to buy Puerto Rican bonds, then, can shield wealthy investors from public knowledge of their complicity in the misery of millions of U.S. citizens.

Or from CNN:

For instance, Autonomy Capital, a New York hedge fund run by former Lehman Brothers banker Robert Gibbins, owns nearly $1 billion of Puerto Rican general obligation bonds, according to court documents filed this summer.

FCO Advisors, a hedge fund run by former Goldman Sachs municipal banker Hector Negroni, is sitting on more than $400 million of Puerto Rican bonds as well.

Another key player: Aurelius Capital Management, a New York hedge fund that lists nearly $500 million in Puerto Rican bonds. Aurelius, run by Mark Brodsky, won big by playing hardball with Argentina for years following that country's default.

It would be nice for the US to say "here, we're giving you this aid money for reconstruction", but that's not how it works since money is fungible. Any gifted money will offset money that would have come from elsewhere, and that money would then go to paying off these billionaires who purchased debt for pennies on the dollar.

Now if PR were to go through a debt restructuring that ensured that any donated funds did not go to line the pockets of the ultra-wealthy profiteers, I would be in favor of the US cancelling the debt on these loans.