The debt collapse of the island’s government has led to the further debt collapse of the pension system and the transportation department.
The inevitability of the Puerto Rico’s debt collapse has been obvious for years, but no one wants to acknowledge reality. Debt collapse is what happens when you borrow and spend an amount that is far beyond anything you could ever repay.
While the media reported the bad news of bankruptcy earlier this month, the full extent of the debt collapse was not acknowledged. Thus, the Wall Street Journal reports, “More Puerto Rico Agencies Enter Bankruptcy.”
The Employees Retirement System, known as ERS, and the Highways and Transportation Authority, known as HTA, entered a debt-restructuring process that amounts to municipal bankruptcy Monday in the federal court in San Juan.
Those two systems are now under a federal debt-adjustment law known as Title III alongside the Puerto Rico government and its sales-tax bond issuer, known as Cofina .U.S. District Judge Laura Swain Taylor, who is presiding over the cases, held the first court hearing on the government’s case last week.
What else will have to place “under court protection”?
Governments get away with this because the decisionmakers responsible for the debt collapse are usually not the same politicians who have to deal with the financial crisis that they caused. As this Bloomberg video makes clear, no one is going to ever be held accountable for the corruption that caused this cascading debt collapse. No one tracked how the money was wasted!
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