Puerto Rico owes $70 billion to various creditors, including American hedge funds and other funds. Puerto Rican debt has been downgraded to junk status. Whether or not Puerto Rico is America’s Greece is rather debatable because the amounts are so much lower for Puerto Rico. Greece owes over 220 billion euros in bailout funds alone. Combined with other debts, the amounts are simply much larger in Greece.
On the other hand, as CNN reports, American investors are often much more invested in Puerto Rican debt than in European debt, so some funds could see 15 percent of their investments disappear if PR defaults. Will the next bailout — funded by you — be a bailout of Puerto Rico? The purpose won’t be to help the Puerto Ricans, of course. The point of the exercise will be to pour more money into Wall Street, just as with the Mexican bailout of 1994. That bailout had nothing to do with the Mexicans. It was about making sure Wall Street investors and other global elites got paid and didn’t have to actually pay the price of making risky investments. Risk is for suckers (i.e., non-billionaires without lobbyists), after all.
