Donald Trump have just told Puerto Rico he won’t be helping them because they have ”far far too much debt” and the U.S. shouldn’t bail them out.
Trump is no stranger to debt, in fact this Republican nominee calls himself ”The king of debt”. And rightfully so, he has filed four bankruptcy filings for his companies in his long business career. But even though he knows what it’s like to be at the bottom, he consider that Puerto Rico has gone way too far and there’s only one way out for the small island: to stop spending so much money.
When interviewed on Wednesday, Trump said ”I wouldn’t bail them out” to CNN’s Wolf Blitzer.
Right now, Puerto Rico is a state of crisis. The debts have run up to over $70 millions. Which is a shocking amount considering there’s only living 3.5 million people on the island.
The island’s governor, Alejandro Garcia Padilla, claims that there’s simply no money to pay back the creditors. The island defaulted for the third time on Monday and there’s another big debt payment due July 1st.
When Alejandro was interviewed on Thursday by CNN, he told them that Puerto Rico is not asking for bailout but rather a change in the legal system. He wants the island to restructure its debts in order to delay or reduce the payments to creditors. Alejandro means this will give the island some more time to get back on it’s feet again.
What Puerto Rico really wants is the ability to do what Trump did with his companies when he filed for bankruptcy.
Sadly the island’s economy in such a state it will be hard to do anything in such short period of time. Puerto Rico’s economy has never been worse than it is today, keep in mind that the island has been in a recession for almost a decade now. The people of Puerto Rico are literally fleeing the island and moving to the USA because the recession have hit them so hard.
The administration of Obama have been pushing for Puerto Rico to get the ability to change their legal system and restructure it through Chapter 9 bankruptcy.
But not everyone is on Obama’s side, the Republican-led Congress means that it’s rather unclear how much Puerto Rico can actually pay. They mean they cannot trust the island’s financial records, Puerto Rico still haven’t finished their 2014 audit.
The Congress have drafted a bill to help Puerto Rico with their financial state and figure out a way to help them out of their debt. It might very well include a restructure, but that will be far from the first step.