Elizabeth Warren is at it AGAIN, this time with a plan to fix Puerto Rico's awful debt problem, which has -- compounded by Donald Trump's racist contempt for the people there -- been an enormous hindrance to the island's recovery from Hurricanes Irma and Maria in 2017. Yes, Trump has made a very bad situation far worse, but as Warren reminds us, the Puerto Rican economy was already in trouble long before 2017. (Here, we shall now assign you some background reading.) To help Puerto Rico get back on its feet, Warren proposes letting the territory seek relief through bankruptcy -- a solution currently denied the island because it's a territory. Since cities and corporations can declare bankruptcy, then a US territory should be able to as well. And while Warren doesn't mention it, we can think of at least one current US "president" who has used the bankruptcylaws to makehimself rich.
As with her proposal to eliminate most federal student loan debts, Warren doesn't waste a lot of time on GOP-style moralizing about how anyone in debt must pay back every penny (unless they're a corporation) or on shaking her finger at Puerto Rico for "taking on too much debt," because right now, the debt crisis is hurting people and the goal is to make Americans' lives better, not lecture them. She's funny that way. And goddamn, the hurting is serious:
It wasn't just the Trump Administration's inept response though. One of the biggest constraints holding back the recovery has been Puerto Rico's debt. Revenue needed to provide services to residents is instead going to pay off old debts. Few investors are willing to put money into rebuilding Puerto Rico with its massive debt overhang because they see no clear path to earning a return on their investment. And while Congress attempted to deal with the Puerto Rican debt crisis a few years ago — with a bill called PROMESA — that bill was enacted before the hurricanes and was not designed to account for the recent devastation.
If Puerto Rico were a big company in this kind of financial trouble, it could file for bankruptcy, pay some of its debts, discharge the rest, then start rebuilding. If Puerto Rico were an American city in this kind of financial trouble, it could do the same. But Puerto Rico isn't a corporation or a city. Because of its unique status, those legal options aren't available — and so it's caught in a terrible position, battered by natural disasters with no clear path to recovery.
The solution she proposes is actually pretty straightforward: Give Puerto Rico access to the same kinds of relief available to a bankrupt municipality or casino developer, and also take into account the fact that Wall Street interests have stacked the debt against the territory. Puerto Rico has $70 billion in government debt, and another $50 billion in pension obligations. To make matters worse, much of the debt is held by some seriously bad hombres, the worst pirates out there because they have the law on their side. Of course they do -- they bought the law and the lawmakers fair and square.
These Wall Street firms are called "vulture funds." They buy the debt of a borrower in trouble, usually for pennies on the dollar, and then pick the bones clean when the borrower can't pay. For Puerto Rico, that means the Wall Street investors get paid by slashing services, selling government assets, and undermining any real chance the island might have to recover economically.
And of course, the board overseeing Puerto Rico's debt under PROMESA -- which Warren reminds us she voted against -- prioritizes payments to the creditors above all else, regardless of how badly the people of Puerto Rico suffer as a result.
So, what to do about it? Warren has re-introduced a bill in the Senate, the "U.S. Territorial Relief Act," which would allow US territories to seek the cancellation of their debts like a common Trump under certain conditions, such as "being struck by a disaster, suffering major population loss, and staggering under overwhelming debt." As for paying back some of the debt, she has a plan for that, too, which would help those who need help and say Fuck You to those who never seem to hear it the first 900 times:
My bill would also set up a fund so that certain holders of Puerto Rican bonds would be compensated when those bonds are terminated. Pensions would be left intact. Puerto Rican residents, individual investors, and credit unions are among the groups that could use the fund. Vulture funds and bond insurers would not get a penny from this fund.
In addition, it would require an audit of Puerto Rico's debt, particularly to settle the question of whether some of the debt was issued illegally in the first place. As it happens, the board governing Puerto Rico's debt has sued to have $9 billion of the debt voided as unconstitutional, so there's some good timing.
Warren notes she has visited Puerto Rico three times as a senator, and that she has
seen firsthand how the tens of billions of dollars of debt hanging over the heads of the Puerto Rican people are blocking their path to recovery. I know that the vulture fund executives see the island's desperation as just another opportunity to make a profit — and it makes me sick.
We can certainly get behind someone who sides with ordinary people in a crisis, not with rich speculators. And with someone whose campaign is selling these nifty shirts.
You know WHO ELSE has a pretty nifty shirt? That would be Yr Wonkette, and you don't even need to live in the USA to buy one!
https://wonkettebazaar.com/collections/elizabeth-warren-2020/products/elizabeth-warren-comrade-tee
We are looking forward to Elizabeth Warren's next policy proposal, which we hope will be aimed at helping us get a replacement for this nice electric scooter that arrived broken. Not cool, Chinese importer company!
[Team Elizabeth Warren on Medium / NYT / Nation / Intercept]
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