No Bailout for Puerto Rico

Oct 6, 2017

President Trump has no plans to bail out Puerto Rico. The island is $73 billion in debt. The island’s government filed for bankruptcy in May. In anticipation that the federal government would bail out the island’s government, big Wall Street companies “bought tens of billions of dollars in defaulted Puerto Rico municipal bonds for as low as 30 cent on the dollar last year.” On Tuesday the president told Fox Business News, “They owe a lot of money to your friends on Wall Street and we’re going to have to wipe that out. You’re going to say goodbye to that, I don’t know if it’s Goldman Sachs, but whoever it is you can wave goodbye to that.” In response, Puerto Rico’s bonds fell by 31 percent as hedge funds panicked at the news. According to White House budget director, while the United States plans to assist the island recover from the hurricane, “Puerto Rico is going to have to figure out how to fix the errors that its made for the last generation on its own finances.”