According to Fox News:
Puerto Rico's governor announced that the U.S. territory has overwhelmingly chosen statehood in a nonbinding referendum Sunday held amid a deep economic crisis that has sparked an exodus of islanders to the U.S. mainland.
Nearly half a million votes were cast for statehood, more than 7,600 for free association/independence and nearly 6,700 for independence, according to preliminary results. The participation rate was just 23 percent with roughly 2.26 million registered voters, leading opponents to question the validity of a vote that several parties had boycotted.
Also covered by AP.
(Score: 5, Informative) by AthanasiusKircher on Monday June 12 2017, @03:47PM (1 child)
Yes, the Puerto Rican debt debacle.
Basically, for much of the late 20th century, Puerto Rico was inexplicably exempted from random U.S. tax laws, which both made it very lucrative to business there and strongly encouraged investors to buy into PR municipal bonds. Then, in 1984, for reasons unknown to anyone in Congress today, Strom Thurmond introduced a measure that specifically removed backruptcy protection to PR from U.S. law; it was buried in a much larger bill that apparently no one noticed. Then beginning in 1996, the U.S. began removing various tax exemptions for PR over a 10-year-period, causing businesses to flee the island and the economy to falter. The government responded to the economic crisis by selling more bonds (which still had huge tax exemptions), and Wall Street investors ate them up like candy.
Now add in one more element: the PR Constitution (which required approval from Congress, because of its territorial status) states that municipal bonds take precedence in their payment over ANY other government expenditure, including essential services.
So, for the past decade, PR has entered a bizarre spiral of debt where it can't attract businesses anymore because it lost its exemptions, it can't restructure the debt or declare bankruptcy because for some weird reason it was specifically exempted by Congress from doing so, and it can't guarantee adequate funds for emergency services, public utilities, schools, etc. until it pays off its bond debts. When it appeals to relief from Congress just for restructuring (not a bailout), Wall Street lobbyists for investors who don't want to lose profits from bonds start calling Congressmen and running TV ads.
Obviously a lot of mismanagement happened in Puerto Rico, BUT a lot of this has also been exacerbated by bizarre exemptions/incentives and shifts in U.S. policy regarding the island. Last year, there was a deal of sorts [wikipedia.org] approved by the federal government which can help with debt structuring, though various aspects of it are controversial.
(Score: 0) by Anonymous Coward on Monday June 12 2017, @09:24PM
Yet another scam perpetrated by an elected official. Of course it was done to Puerto Rico, they are the red headed step child of the US that no one pays attention to. If this was any other state you can bet a lot of things would be reversed or fixed. Yay wallstreet scamming the public! Capitalism without the capital!