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Amid Puerto Rico debt woes, reality hits San Juan streets
Miami Herald
Nancy San Martin
6/30/2015
Excerpt:
SAN JUAN - The signs of a struggling economy can be seen in the shuttered restaurants and bars in previously thriving Old San Juan. In the faces of business owners who spend much of their day trying to coax customers through the doors. In statistics that show the island’s population has plunged over the past decade. And in the sense of indifference from people who can't afford to leave and have become used to a hard life.
“Were not going up or down; we’re stuck,” said Rosa Arias, a spunky 70-year-old who stopped earning an income three years ago as a babysitter when the parents of those children lost their own jobs. “I manage to eat and sleep, but that’s it. I live day to day.”
Arias’ existence is part of the “harsh reality” outlined Monday night by Gov. Alejandro García Padilla, who said the U.S. territory can’t pay back some $72 billion in public debt and called on Puerto Ricans to share in making sacrifices.
Puerto Rico’s dilemma is sure to affect the international financial system, which is already wobbling from the economic turmoil in Greece.
For many of Puerto Rico’s 3.6 million residents, who have been dealing with economic uncertainty for years, life is about to get more expensive.
A new sales tax of 11.5 percent — the highest compared to any U.S. state — takes effect Wednesday. Puerto Rico also has the highest municipal bond debt per capita of any U.S. state.
“Puerto Rico needs a restructuring plan,” García Padilla said in his televised address. “We must act now. ... I know it’s not easy but I also know we have no alternative.”
The governor said he will begin meeting with legislators and other leaders to discuss how best to resolve the financial crisis. He has said he wants a debt repayment moratorium of several years and in his address said his administration would lobby Washington for the right to file for bankruptcy under Chapter 9.
However, because Puerto Rico is not a state but a U.S. territory, neither the island’s government nor its public agencies can file for bankruptcy unless the law is amended.
On Monday, the White House urged U.S. legislators to consider changing the law. However, a federal bailout of Puerto Rico is not under consideration.
The governor’s team has until Aug. 30 to develop an economic and financial reform plan, which must approved by the island’s legislature.
.................................................. .......
View the complete article, including images, at:
http://www.miamiherald.com/news/nati...e25818208.html
Miami Herald
Nancy San Martin
6/30/2015
Excerpt:
SAN JUAN - The signs of a struggling economy can be seen in the shuttered restaurants and bars in previously thriving Old San Juan. In the faces of business owners who spend much of their day trying to coax customers through the doors. In statistics that show the island’s population has plunged over the past decade. And in the sense of indifference from people who can't afford to leave and have become used to a hard life.
“Were not going up or down; we’re stuck,” said Rosa Arias, a spunky 70-year-old who stopped earning an income three years ago as a babysitter when the parents of those children lost their own jobs. “I manage to eat and sleep, but that’s it. I live day to day.”
Arias’ existence is part of the “harsh reality” outlined Monday night by Gov. Alejandro García Padilla, who said the U.S. territory can’t pay back some $72 billion in public debt and called on Puerto Ricans to share in making sacrifices.
Puerto Rico’s dilemma is sure to affect the international financial system, which is already wobbling from the economic turmoil in Greece.
For many of Puerto Rico’s 3.6 million residents, who have been dealing with economic uncertainty for years, life is about to get more expensive.
A new sales tax of 11.5 percent — the highest compared to any U.S. state — takes effect Wednesday. Puerto Rico also has the highest municipal bond debt per capita of any U.S. state.
“Puerto Rico needs a restructuring plan,” García Padilla said in his televised address. “We must act now. ... I know it’s not easy but I also know we have no alternative.”
The governor said he will begin meeting with legislators and other leaders to discuss how best to resolve the financial crisis. He has said he wants a debt repayment moratorium of several years and in his address said his administration would lobby Washington for the right to file for bankruptcy under Chapter 9.
However, because Puerto Rico is not a state but a U.S. territory, neither the island’s government nor its public agencies can file for bankruptcy unless the law is amended.
On Monday, the White House urged U.S. legislators to consider changing the law. However, a federal bailout of Puerto Rico is not under consideration.
The governor’s team has until Aug. 30 to develop an economic and financial reform plan, which must approved by the island’s legislature.
.................................................. .......
View the complete article, including images, at:
http://www.miamiherald.com/news/nati...e25818208.html