Puerto Rico zorretan

https://www.unibertsitatea.net/blogak/heterodoxia/2011/10/09/greziarako-proposamena/.

Greziako irteeraz (Grexit delakoaz), zenbait iritzi (edo Puerto Ricexit)

1 Ikus Puerto Rico: https://eu.wikipedia.org/wiki/Puerto_Rico eta https://en.wikipedia.org/wiki/Puerto_Rico.

2 Besteak beste, honelakoak: “…the firing of 30,000 public employees, tax reform favorable to the rich, increases in tuition fees for higher public education, the privatization of public assets, deregulation of business permits, and the like.”

3 Ingelesez: “Unsurprisingly, these policies did not have the desired effect. In the first place, it is theoretically and practically known that an economy experiencing a downturn will probably not experience growth if government spending is reduced. Puerto Rico’s own economic history attests to the importance of the public sector and government spending in fostering economic growth.”

4 Ingelesez: “The economic model of “industrialization by invitation” that for decades has characterized industrial policy in Puerto Rico has been sustained by a high number of subsidies and tax exemptions whose purpose is to attract foreign (mainly American) capital. This tax and corporate haven arrangement, with no accountability in the case of private failure, has further accentuated the fragility and dependence of the economy.”

5 Ingelesez: “… a substantial amount of wealth created in the island is extracted and not reinvested — $35 billion in manufacturing profits, or approximately a third of GNP, are repatriated back to the United States.” (Amerikar bilio bat: 1.000 milioi)

6 Ingelesez: “The cuts in public spending, best exemplified by the mass termination of public employees in 2009, have had a negative multiplier effect on the economy because they’ve failed to spur an increase in private sector investment and employment.

To cover the shortfall, the New Progressive Party issued around $17 billion in debt over its tenure, or 22 percent of GNP. In other words, more than a fifth of the country’s total debt burden was comprised of bonds and lines of credit opened by the public sector to contain an economic freefall effectively created by the same government.”

7 Ingelesez; “It is also important to point out that, apart from the debt, this government had access to $6 billion dollars (8.6 percent of GNP) courtesy of the Obama administration’s American Recovery and Reinvestment Act, and to liquidity injected into the local banking sector to prevent its decapitalization. The most conservative estimates calculate that around $25 billion was funneled into the Puerto Rican economy, meaning outright austerity would have had even more dire consequences.”

8 Ingelesez: “In 2013, the New Progressive Party was voted out and replaced by the Popular Democratic Party, a purportedly center-left formation that had promised to stop laying off public employees. (…) Despite its tepid program, the new administration’s arrival prompted immediate credit downgrades from Moody’s, S&P, and Fitch; the shutting off of access to primary debt markets for the Puerto Rican government; and a fall in the value of the country’s bonds in secondary markets. To make matters worse, many of the government bonds contained “acceleration clauses,” which meant that the minute the Puerto Rican government failed to make a payment on time, it owed the debt in full. Since it was shut out of credit markets, it couldn’t refinance the debt by issuing new bonds. When its debt servicing payments doubled, the government responded by slashing public spending. Soon after, it increased the tax on oil and hiked the sales tax, burdens that have contributed to soaring costs of living.”

9 Ingelesez: “In the meantime, debates have sprung up about whether the debt should be restructured or paid back under the original conditions agreed upon with creditors. Proposals from new political parties and law projects emerged out of these debates, providing the government with some ammunition to declare a moratorium on the payment of the debt, to audit it, and to renegotiate it. But of all the proposals, only one became law — the right to declare local bankruptcy.”

10 Ingelesez: “After multiple failed attempts at renegotiating and restructuring the debt via legal and institutional mechanisms that require a specialized third party, the Puerto Rican government commissioned a study from advisers associated with the International Monetary Fund (IMF). Published at the end of June, the report proposed a raft of supply-side measures: reducing production costs (mainly labor costs), reforming the tax code with more weight on real-estate property and indirect taxes (direct taxes would be eliminated), and cutting the budget of the Puerto Rican government’s General Fund. Current debates about the study have focused on the fact that the majority of the proposals to reduce production costs — decreasing the minimum wage, weakening labor protection laws, exempting the country from cabotage laws — are at odds with federal laws prohibiting their supersession by an institution like the IMF.”

11 Ingelesez: “Shortly after, mutual and hedge-fund bondholders commissioned a second study, appealing to the “expertise” of economists who have also worked for the IMF. The authors concluded that the debt was payable without concessions to bondholders, in clear contrast to the first report. The report’s analysis was clearly a reaction to the statement of the statement on June 28 by Puerto Rico’s governor that the island’s “debts are not payable,” a statement that has recently materialized with the inability of the government to meet an August 3 deadline for a full $58 million bond payment.”

12 Ingelesez: “This, and other potential future defaults, will probably accelerate the implementation of what both commissioned studies suggested: more doses of austerity (closing of schools, firing of teachers, reduction of the minimum wage, etc.) to pay off the debt.”

13 Ingelesez: “Paul Krugman recently wrote that thanks to the safety net provided by the federal system and “big government,” Puerto Rico’s case “is one of bad times that fall well short of utter disaster.” Like a good philanthropist, our Nobel laureate seems to want Puerto Ricans to be thankful for what they have received, given that they have not ended up like Greece.“ Ikus America’s Un-Greek Tragedies in Puerto Rico and Appalachia: www.nytimes.com/2015/08/03/opinion/paul-krugman-americas-un-greek-tragedies-in-puerto-rico-and-appalachia.html?ref=opinion.

14 Ingelesez: “This myopic take, however well-intentioned, abstracts from the historical processes of political and economic control and wealth extraction by the United States over its colony of 117 years, processes that to this day shape the downward spiral in which a decomposing Puerto Rican society finds itself.” Ikus On the Puerto Rican Debt Crisis: A Reply to Krugman: http://newpol.org/content/puerto-rican-debt-crisis-reply-krugman.

15 Ikus https://www.unibertsitatea.net/blogak/heterodoxia/2015/08/23/paul-krugman-eta-warren-mosler-zorrari-buruz/.