The US government has once again deemed the Puerto Rican officials too stupid to solve their own problems and has issued a very expensive bailout to the island territory. PROMESA promises that the bondholders (those investors who put money up front and took money risks on a bet that Puerto Rico would be good for its debt) will be shafted and will most likely never see a dime of their financial input. What choice do they have, as well? They have been instructed through this PROMESA bill that not only must they accept whatever Puerto Rico decides to do for its government employees in the way of lucrative Christmas bonuses, but that bondholders are basically shut down from pursuing a negotiable way to recoup their losses.
In other words, those who took a risk on Puerto Rico, with money up front, have now been told to pound sand. Worse yet, now these same risk-takers must watch in seething anger as the Puerto Rican authorities, officials and politicians take all the extra income they’ve stolen and handed it directly over to the unions for their pensions.
This bailout has been a raging success for Puerto-Rica government workers. They’ve inherited a $100M money tree that automatically grows money each time its harvested.
Now for the really annoying part: Right after begging for their $94M bailout (and getting it, no questions asked) they then turn around and dole out $100M to the government employees as a Christmas thank you.
But if you’re enraged at this news now, keep in mind that the powers that be already knew that this was going to occur. How?
All they had to do was look at 2016 when they doled out $120M in Christmas bonuses!
Oh, and, by the way, they did it in 2015, too! Another cool $120 mil!
Puerto Rico Gov. Ricardo Rossello Nevares last month asked federal taxpayers to shell out $94 billion to pay for the territory’s recovery from Hurricane Maria — then turned around and paid out about $100 million in Christmas bonuses to island government employees.
The governor’s aides say the bonuses are a longstanding tradition and part of the law, and were planned for in the budget approved last summer.
But that budget came well before Hurricanes Irma and Maria slammed into Puerto Rico, leaving much of the territory in ruin and leaving the government begging for federal assistance.
The island’s financial oversight board, created by Congress as part of a deal to bail the government out of a potential debt default last year, called the payments “imprudent” and said the hurricanes should have forced the governor to rethink his decisions.
And the payments could dent Mr. Rossello Nevares’ efforts to get Capitol Hill to pony up for the recovery, where the $94 billion price tag the island has set is already meeting with shock.
The bonuses, which analysts said are not uncommon in Latin America, date back to the 1970s in Puerto Rico. But they’ve been controversial in recent years as the island has struggled with debt. The payments in 2015, of about $120 million, sparked a fierce debate.
This year the payments will total $113 million, the government told Bloomberg News. Some 250,000 people get bonuses, with current workers averaging $600 bonus and retirees getting about $200, Bloomberg reported.
For the majority of government employees who make between $20,000 and $40,000 it’s an important boost, said Carlos Mercader, who leads Puerto Rico’s office in Washington, D.C. He said the governor, in making the payments, is following the law.
And just for the record, this same exact problem has also occurred in the Virgin Islands. Both Puerto Rico and the Virgin Islands have been dominated by Democrat Leftist politicians in nearly every seat of authority, from governor down to dog catcher, the result being a complete and utter bankruptcy festival where Christmas is celebrated with zeal and brightly colored checks in the mail!
But, don’t fret. Paul Ryan and Nancy Pelosi have both assured us that this is not, I repeat, not a bailout.
Source: Bloomberg Markets