Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Puerto Rico files for biggest ever U.S. local government bankruptcy

reuters.com

Post reply on HN
Print view View original

291–300 of 481 posts

Re: Puerto Rico files for biggest ever U.S. local government bankruptcy

#291

Post by 6stringmerc »

6stringmerc wrote: post #35

All that text about Puerto Rico's financial difficulties and not one mention of the rampant fraud that spun up the debt from a reasonable amount to the $XB that is likely to default is the result of graft, corruption, and fraud enabled by many US and international actors. Want to take a guess how many of those responsible for the transactions, debt issues, and back-office fund transfers are in jail and all their asse…

On a side note, it's hard to believe my off-hand dredging of historical knowledge would be a viable critique for a piece posted on Reuters, an establishment I genuinely respect. I'm no journalist, but maybe I could have a chance at helping them out. To quote the great Tyler Durden, "I can do this job from home."

Re: Puerto Rico files for biggest ever U.S. local government bankruptcy

#292

Post by adrianratnapala »

pboutros wrote: post #4
djsumdog wrote: post #2

Puerto Rico should really be a state by now. Would it being a state given it any distinct advantages (or are there any specific problems in light of it not being a state) in this type of situation?

Cities and states have access to debt restructuring methods (per this article), which PR does not. http://www.cnbc.com/2015/12/01/crunch-time-for-puerto-rico-d...

I think the point is that the states, being states, are in the same situation as the federal government is. They can tell creditors to go *k themselves. And then both sides get to bear the consequences.

In truth, something similar is true for local governments as well, in practice.

Re: Puerto Rico files for biggest ever U.S. local government bankruptcy

#293

Post by stickfigure »

ue_ wrote: post #114
dragonwriter wrote: post #59

Earlier quoted context omitted.

> Since it's illegal for large portions of the population to receive pay commensurate to the value they're able to produce, and it is legal to move to the US, guess what folks do? If they can't produce enough value to justify minimum wages, why would they move to places with a higher cost of living? They move to the States because the States are better able to attract businesses that will pay them what they are capab…

>If they can't produce enough value to justify minimum wages There are alternative views on this. Marx's theory for example says that workers are not paid according to the value they create, or what their labour creates, rather they are paid at the rate which is required to sustain them. The commodity which the worker produces and sells is termed 'labour power', requiring among other things food, enough to support a…

Marx is trivially easy to refute. Try this exercise: See how far you're going to get with your startup by offering to pay software engineers "enough to sustain them".

This is cartoonish. I can't believe people say stuff like this in the 21st century.

Re: Puerto Rico files for biggest ever U.S. local government bankruptcy

#294

Post by 6stringmerc »

kmc059000 wrote: post #289
hkmurakami wrote: post #38

Earlier quoted context omitted.

Would love to read more on the subject if you have links to both the PR and Dallas situations handy.

Here is an article on the Dallas pension problem. http://www.economist.com/news/finance-and-economics/21711335... The gist as I understand is that pensioners were promised a 8.5% return (which didnt happen) and (some?) retirees are able to withdraw their current value in their pension in full. There is talk of reducing benefits, which is causing a situation much like a run on banks to occur. I've seen a few proposed…

Great find and thank you for kicking in - what the backstory might not address is that in pursuit of the 8.5% return, the fund management engaged in exceptionally risky investment schemes. Took trips to "scope out opportunities" on the Pension tab year after year totaling a bunch. The whole operation was shady and unchecked for at least a decade.

By the time anybody started paying attention, the wound had festered into a real infection. An almost uncontrolled fiasco of promises to the Police/Fire Unions and no chance of hitting the returns, and essentially gambling away millions that will only lose more in 10 years if that garbage isn't unwound like a bunch of bad Bear Stearns Swaps.

It's so ugly. It's an embarrassment. And the people who end up holding the bag look terrible for telling a 53 year old retired cop he shouldn't be able to pull out $1.7M in benefits and put a run on the account. Ugh!

Re: Puerto Rico files for biggest ever U.S. local government bankruptcy

#295

Post by myrandomcomment »

njovin wrote: post #194
enraged_camel wrote: post #179

Earlier quoted context omitted.

>>I don't know about "taken lightly" but bankruptcy and defaulting on a debt should not be something to be "ashamed" of, for an individual, a company, or a government. It totally depends. There is nothing shameful about declaring bankruptcy because you got into an accident and your insurance company refused to pay your six-figure hospital bill. But if you take out a big loan to build a new hotel and blow it all on ho…

That sounds more like fraud. What if I take out a loan, am perfectly capable of paying it off, but the asset backing the loan has lost sufficient value so as not to be worth the continued investment? Is there any shame in defaulting and letting the lender suffer some of the consequences? In my personal opinion, no. Especially with secured or collateral-backed loans, the lender knew there was risk going in and there's…

Sorry but what you are saying is since people are too stupid to understand the contract they signed and to do some math it is the companies fault?

My wife and I at one point were in the hole nearly 1m. The crash put my house way under and the job money fun time went away. It sucked. You know what we did. We canceled the cable TV, we stopped eating out. We watched every penny. I work jobs I hated, hated, hated. We got credit councling and got on a plan with them and stuck to it. We paid our debt.

I am by no means saying that banckrucy should not be an option in some cases. Our medical systems is a mess and that is a huge cause of banckrucy. However let's be clear people signed those loans without understanding it and it is their fault. I knew the cost of the interest only loan I had. I got burned but it was a bet I entered after doing research and math, etc. When it did not work out I sucked it up and delt with it.

I agree that some companies did some shady stuff, but really? You get something to good to be true and you don't question it? The consumer has to take some responsibility for their actions.

Re: Puerto Rico files for biggest ever U.S. local government bankruptcy

#296

Post by jpttsn »

gertef wrote: post #216
zepto wrote: post #150

Earlier quoted context omitted.

Assets provide return on investment. Children do not. Using this term just muddies the water.

The only investment a human can make is in their genetic future. Everything else (money, power) is in service of that.

You might as well say the only investment any human can make is in producing excess heat in the universe.

Re: Puerto Rico files for biggest ever U.S. local government bankruptcy

#297

Post by rovr138 »

skrymsli wrote: post #91
fiatjaf wrote: post #24

Earlier quoted context omitted.

Absolutely. Governments are stupid to borrow money and waste it, but banks were supposed to be even more stupid to lend money to these reckless institutions called governments, and it's not wrong if these banks pay the price of their stupidity.

Is it stupid though, if the government then bails them out? In the end it's always the poor people that get screwed.

Is the ability to bail them stupid or the instance?

I don't think the ability is stupid. Is the instance? Can't tell.

Re: Puerto Rico files for biggest ever U.S. local government bankruptcy

#298

Post by dangerlibrary »

seanmcdirmid wrote: post #220
zeteo wrote: post #171

Earlier quoted context omitted.

I'm not familiar with American Samoa, but generally states and countries with high minimum wages are doing pretty well economically, see e.g. [1]. States that have recently increased the minimum wage have seen higher economic growth than those that haven't [2]. [1] http://www.scholarsstrategynetwork.org/brief/evidence-higher... [2] http://www.npr.org/sections/thetwo-way/2014/07/19/332879409/...

I'm pro minimum wage, but states that have higher minimum wages tend to already have their heads on straighter economically. E.g. Washington state invests heavily in education and caters to high tech more than other states, while California has of course always been a gold mine. Correlation is not causation.

The classic paper on minimum wage hikes and employment rates is Card and Krueger.

On April 1, 1992 New Jersey's minimum wage increased from $4.25 to $5.05 per hour. To evaluate the impact of the law we surveyed 410 fast food restaurants in New Jersey and Pennsylvania before and after the rise in the minimum. Comparisons of the changes in wages, employment, and prices at stores in New Jersey relative to stores in Pennsylvania (where the minimum wage remained fixed at $4.25 per hour) yield simple estimates of the effect of the higher minimum wage. Our empirical findings challenge the prediction that a rise in the minimum reduces employment. Relative to stores in Pennsylvania, fast food restaurants in New Jersey increased employment by 13 percent. We also compare employment growth at stores in New Jersey that were initially paying high wages (and were unaffected by the new law) to employment changes at lower-wage stores. Stores that were unaffected by the minimum wage had the same employment growth as stores in Pennsylvania, while stores that had to increase their wages increased their employment.

http://www.nber.org/papers/w4509

Re: Puerto Rico files for biggest ever U.S. local government bankruptcy

#299

Post by peatmoss »

SEJeff wrote: post #65
knob wrote: post #5

I have lived all my life in Puerto Rico, and as you can imagine, this issue is quite controversial. We owe money to the creditors... and what you do with a debt is to you pay it off. Yet the amount is so staggering, that I wonder if it's actually possible. As is typical, decisions by politicians placed us in this situation. Decade after decade, 4-year term after 4-year term, the government has spent money it does not…

What are your thoughts on Puerto Rico becoming the 51st State of the USA? I ask this as a native (mainland) born American who always thought this would be an interesting approach to solve the problem of finances in PR. Is it even well supported or is it a crazy idea?

As a non-Puerto Rican, I have my own selfish reasons for wanting statehood: Can we make Spanish an official language already, please? I like the idea of Puerto Rican statehood, because I believe it would force our country (i.e. the US as a whole) to reconsider this issue.

Re: Puerto Rico files for biggest ever U.S. local government bankruptcy

#300

Post by stickfigure »

debacle wrote: post #290
pryelluw wrote: post #275

Earlier quoted context omitted.

Absolutely. Go to the west side to Cabo Rojo. Eat some great fresh seafood. Then head to Lajas (15 min drive) at night to see the bioluminiscent bay (wear jeans and bring mosquito repelent). Then go to the east side and end up in Fajardo. Visit El Yunque and then eat some local delicacies in los kioskos. After all that, call me, and Ill take you to my dads hacienda where Ill serve some rice and beans while you relax…

How much Spanish should I try and pick up? Will it help?

If you love to travel, you should pick up as much Spanish as you possibly can! The best analogy I can think of is that it's like learning to scuba dive - it grants you access to a whole new fantastic world that you previously could only spectate on TV. Latin America is huge and diverse and wonderful (for that matter, Spain is pretty awesome too).
Post reply on HN