Puerto Rico’s debt is so bad that they’d like to declare bankruptcy, but can’t. Dysfunctional aspects of the way the island has been incorporated into the US means the island has fewer options to resolve its financial crisis. Unfortunately, the creditors have many options and are exercising them.
“members of the governor’s working group explained the members of this board would be chosen by “interested parties” including the hedge fund creditors, and it would have power over the democratically-elected local government”
To pay off the debt, Puerto Rico is being instructed to lower minimum wages, curtail organized labor, and reduce funding to schools. These are many of the tactics advocated by more extreme conservatives from the mainland where the initiatives have met resistance from ‘democratically-elected local governments’. Puerto Rico, therefore, becomes an unwilling testbed for economic hypotheses, and a region that has lost some of its sovereignty.
(Click on the photo for the link.)