Instead of a bailout, Puerto Rico just needs a little supervision. At least that’s what is being reported in today’s El Vocero newspaper.
The report quotes sources that the Obama administration has established a special working group to help Puerto Rico with its financial crisis and that the group has already met with members of the administration of Governor Alejandro García Padilla.
It begs the question: how can a nation with US$17 trillion in federal debt, US$60 trillion in total debt, and by some estimates up to US$125 trillion dollars in unfunded liabilities — which as of this writing is also in a politically created government “shutdown” — give anyone advice on how to manage money? Just check the debt clock and the numbers below from the Institute for Truth in Accounting.
The news of possible federal supervision over Puerto Rico’s debt and economy comes amid another report that Puerto Rico agency heads are heading to Washington this week in search of more federal funds. Did anyone tell them about the government shutdown? The sequester?
Amid a declining population and shrinking economy, the Puerto Rico government’s main plan for dealing with the financial crisis is to raise taxes. That means no serious plans for cutting back on the size of government, nor to deal with the US$30 billion in unfunded public employee pensions, nor to help small business. Instead there is a good old fashioned political working group, a road show, and a public relations campaign designed to blame the last administration.
Let me say it again, the current governor and his administration have not one single plan to address the fundamental problems at the core of the island’s crisis: public sector unions, an oversized government, over regulation, and a population dependent on government handouts. They have no real plan to fix the island’s massive unemployment problem or the domino effect of formerly well paid workers, either out of work or working for much less than they would normally accept.
Watching the politicians deal with the financial crisis both in Washington and San Juan is like watching the “Three Stooges” try to rob a bank with no guns and no plan.