Despair and Anger as Puerto Ricans Cope with Debt Crisis

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I am a little tired of reading news on Puerto Rico’s financial predicament and—yes—I would rather stick my head in the sand, but here is one more article on the island’s “chronicle of a debt foretold.” Terribly depressing, but . . . here are excerpts of “Despair and Anger as Puerto Ricans Cope with Debt Crisis.” (Happy “Independence” Day to you too. . . ) The New York Times reports:

It’s the lunch hour at Baker’s Bakery, a fixture in Río Piedras, one of Puerto Rico’s oldest neighborhoods, but the bustle at the counter is long gone. The front door opens and shuts only a few times an hour as customers, holding tighter than ever to their money, judiciously pick up some sugar-sprinkled pastries and a café con leche.

On the first day of the new sales tax, which jumped to 11.5 percent from 7 percent, the government’s latest rummage for more revenue, Puerto Rico’s malaise was unmistakable. “People don’t even answer you when you tell them, ‘Buenos dias,’ ” said Ibrahim Baker, 55, on Wednesday as he stood at the cash register of the bakery he has owned for 25 years. “Everyone is depressed.”

After nearly a decade of recession, Puerto Rico’s government says it cannot pay its $73 billion debt much longer. Gov. Alejandro García Padilla warns that more austerity is on the way, a necessity for an island now working feverishly to rescue itself. With so many bracing for another slide toward the bottom, the sense of despair grows more palpable by the day. [. . .]

Before long, Puerto Ricans will face more tax increases — the next one is in October. Next on the list of anticipated measures, these for government workers, are fewer vacations, overtime hours and paid sick days. Others in Puerto Rico may face cuts in health care benefits and even bus routes, all changes that economic advisers say should be made to jump-start the economy.

People ricochet from anger to resignation back to anger again. Along San Juan’s colonial-era streets, in homes and shops, Puerto Ricans blame the government for the economic debacle. Election after election, they say, political leaders took the easy way out, spending more than they had, borrowing to prop up the budget, pointing fingers at one another and failing to own up to reality.

[. . .] Taxes continue to go up. But so do other costs. Living on an island, many business owners must ship their goods in from a mainland port, already a costly proposition. But a 1920 law, the Jones Act, which requires Puerto Rico to receive its shipments from the United States on American-built ships with mainly American crews, makes the cost of transporting goods even more expensive. Recently, it got costlier, Mr. Baker said.

Now there is a chorus of calls for Congress to relax the law as it relates to Puerto Rico. And some powerful Democrats are rallying behind the idea of granting Puerto Rico, a commonwealth, the ability to file bankruptcy for some of its debt-laden agencies.

[. . .] Many others in Puerto Rico, including a stream of professionals and middle-class workers, have sought alternatives. They have moved to the mainland for jobs and better prospects. Over the past decade, Puerto Rico has lost more than 5 percent of its population, which now numbers 3.6 million, according to a New York Federal Reserve report. An additional 250,000 people are expected to leave by 2020, according to the Puerto Rico Planning Board.

This year, the government closed dozens of schools across the island. About 40 percent of the island’s municipalities now have more old people than children, which means fewer workers in the pipeline and a greater need for benefits like Medicare. [. . .]

For full article, see http://www.nytimes.com/2015/07/04/us/despair-and-anger-as-puerto-ricans-cope-with-debt-crisis.html?fb_ref=Default&_r=0

One thought on “Despair and Anger as Puerto Ricans Cope with Debt Crisis

  1. Reblogged this on It Is What It Is and commented:
    Puerto Rico is in dire straits …. The “colonial master” looks the other way, waiting for the perfect time to
    “snatch” the good stuff there for a second time in history! Let it sink …. and then dive like vultures grabbing what the Islanders can’t afford! Reminder: Puerto Ricans ARE American citizens!!

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