Alan Gomez of USA Today is reporting Puerto Rico is days away from a historic economic collapse. Gomez writes:
“Gov. Alejandro García Padilla, who took office two years ago, told Puerto Ricans during a televised address Monday that his government’s attempts to slash expenditures and restructure its debt have failed. He said an analysis by former World Bank and International Monetary Fund officials showed the ‘harsh reality’ of the economic situation.
‘Our public debt…is unpayable,’ he said. ‘The report states even if we increased taxes and cut back spending, the magnitude of the problem is such, because of the weight of the debt we carry, that it would solve nothing.’
White House spokesman Josh Earnest said Monday that the Treasury Department has already been providing guidance to the island’s government and that an interagency task force would help identify existing federal funds that it could benefit from. But he said the administration was not considering any kind of bailout for the island of 3.5 million people.
‘There’s no one in the administration or in D.C. that’s contemplating a federal bailout of Puerto Rico,’ Earnest said. ‘But we do remain committed to working with Puerto Rico and their leaders as they address the serious financial challenges.'”
The impact of the default will be disastrous for Puerto Rico, which cannot pay the $72 billion debt. The default coupled with the economic collapse of Greece’s economy could spell trouble for financial markets.
Read more at USA Today.
This post was written by Nsenga K. Burton, Ph.D., founder & editor-in-chief of the Burton Wire. Follow her on Twitter @Ntellectual.