
Why is Puerto Rico in bankruptcy? - Bordecorex
https://www.globalpoliticsandlaw.com/2017/04/22/crisis-puerto-rico-explained-5-graphs/
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sqeaky
Puerto Rico becoming a state would solve a bunch of their problems in the long
run.

Even with the problems listed in the article their economic situation from the
the 90s to now was not unmanageable, it was corruption and corporate collusion
to extract the maximum amount of money from the island that expanded the
problems to their current levels. Becoming a state would put enough regulation
and oversight in place to make those problems go away, or at least put their
corruption on the same level as a normal US state.

The short run... There will be problems.

~~~
chimeracoder
> Becoming a state would put enough regulation and oversight in place to make
> those problems go away, or at least put their corruption on the same level
> as a normal US state.

Becoming a state wouldn't fix the combined impact of NAFTA + the Jones Act,
which alone is enough to wipe out the economy[0]. Corruption may be a cherry
on top, but eliminating that doesn't solve the problem that there is simply no
way they can export anything at a competitive rate, and that they _also_ can't
import things they need at reasonable prices either.

And becoming a state is in Puerto Rico's best interests, but it doesn't fix
this problem either. Hawaii is suffering as well from the Jones Act - the
difference is that Hawaii's economy was slightly less dependent on NAFTA-
affected trade, and over 20% of Hawaii's economy comes from the military and
national defense. So Puerto Rico is hit harder, but not for reasons that would
be solved by statehood.

[0] NAFTA itself would not have been as much of a problem for Puerto Rico if
it weren't for the Jones Act, so it's specifically the combination of both
that's relevant.

~~~
dbjacobs
Hawaii definitely needs an exemption from the Jones act. It is crazy that
goods from Asia to Hawaii go through California because if the non US flagged
ship stops in Hawaii, it can't continue to California.

As stated, statehood would not solve this part of the problem for Puerto Rico
(i.e., they would need a Jones Act exemption as well).

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uiri
Wouldn't going from Hawai'i -> Canada/Mexico -> US solve this?

Similarly for Puerto Rico, wouldn't Florida -> The Bahamas -> Puerto Rico
solve some of the issues?

The only issue with adding foreign stops is the additional import/export
regulations. NAFTA solves some of that for an intermediary stop in
Canada/Mexico, but doesn't do much to help Puerto Rico's situation.

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candiodari
I hope that this can once and for all time convince investors of a basic
truth. These are US government bonds. They are not going to be repaid.

What is generally believed:

Government bonds (with a few exceptions) have always, and will always be paid
back no matter how much money the government loses, or how bad the economy is.
Simply because governments can't go bankrupt.

Reality:

Government bonds, for all governments including the US government, have never
been paid back, with ONE exception (in 4500 years of capitalist history). As
soon as the governments get into trouble, losses are imposed on creditors
immediately, and often repeatedly. Since states survive, on average, less than
2 centuries, the default rate on government bonds (including government bonds
of global hegemons), over all of history, is about 2.8%.

Therefore any government-issued bond that pays less than 2.8% interest is a
net-negative investment.

Even the corollary, that government debt is safer than large company issued
debt is wrong. Large companies only have default rates of 2.5%. The difference
is even larger in the US because the US of course defaulted in practice when
Nixon killed the Gold standard, and so did most if not all governments
worldwide. Companies that had issued bonds at the time, most paid them back
just fine. Same with WWII. After world war 2, a lot of large company debt was
actually transferred back to the owners, whereas even the German state did not
even repay it's postwar debts.

Even in cases where it's incredibly ridiculous and morally wrong, governments
don't pay back debts. Take for example the German debt to Greece from WWII.
The Germans decided not to pay it back, and Greece had no way to enforce this.
They still don't, and now that Germany can impose monetary limits on Greece,
they still don't see any need whatsoever to pay back their owed debts [1]. And
yes, the German debt to Greece FAR exceeds what Greece would need to get out
of their crisis. Even now, the German state is not willing to even forgive
Greek debt to the amount they still owe the Greeks.

[https://en.wikipedia.org/wiki/German_reparations_for_World_W...](https://en.wikipedia.org/wiki/German_reparations_for_World_War_II#Greece)

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Boston14
Good explanation!!!

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failrate
They attempted an indigo and sugar strategy? The player to their right was new
and didn't know how to play?

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sergior
From a tourist point of view it is just much easier to visit neighbouring
Caribbean islands...

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nkrisc
Could you elaborate at all? What's easier? I've not travelled in the
Caribbean.

~~~
KingMob
I'm not sure what the parent is referring to. If you're an American citizen,
you don't need a passport, just book a flight. Large numbers of the population
speak English, and much of the US is already there. The roads are the same,
the dollars are the same, hell, even the fast-food is the same.

~~~
matt4077
> The roads are the same, the dollars are the same, hell, even the fast-food
> is the same.

And those are supposed to be features?

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Omnius
Yes knowing what side of the road to drive on and understanding driving laws
and being able to spend the currency you already have are indeed features.

~~~
mtanski
Man, where is your sense of adventure.

~~~
nkrisc
People who want an "easy" vacation (per the original commenter) are not
looking for an adventure.

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rovr138
Maybe not an adventure, but you can do some fun things.

\- Culebra has amazing beaches \- Visit the bioluminescent bay \- Visit El
Yunque. You can do the regular tour or visit other trails. \- You can go
rapeling \- You can go SCUBA diving \- You can go visit reefs \- You can go
zip-lining

They're not limited to PR, but you can do them someplace new/different.

You can escape the cold. (45° here and raining. I _kind_ of wish I was back in
PR)

