Greece, Puerto Rico, and the IMF: How Freddy Krueger will kill Puerto Rico

War Against All Puerto Ricans: Revolution and Terror in America’s Colony

The Greek economy has collapsed. Over the past five years, its GDP shrank by 25%.  Youth unemployment stands at 60%.

As of yesterday, June 29, it closed all its banks for one week.

Today, June 30, it defaulted on an €1.55 billion ($1.73 billion) payment to the International Monetary Fund (IMF).

It also imposed a nationwide restriction on ATM withdrawals, with a strict limit of 60 euros ($67) per day. Across the entire country, thousands of senior citizens swarmed their local bank branches, demanding their weekly government checks. They were all turned away.

Seniors shut out of an Alpha Bank branch in Thessaloniki, Greece

Greece is imploding.  Politics and self-interest took priority over sound management, until it was too late…and now the same thing, at the same moment, is happening in Puerto Rico.

The island owes a public debt of $73 billion. Over the past year, Wall Street demoted this debt to “junk bond” status.  The government is now teetering on bankruptcy and raising taxes in every direction. A new 11.5% sales tax goes into effect tomorrow (July 1), gasoline taxes were raised twice last year, and utility rates – electricity and water – have skyrocketed in each of the island’s 78 municipalities.

 

Three Card Monte from Three Rating Services

This “public debt” is really a public scandal. A great deal of waste, nepotism and corruption exists in the government of Puerto Rico, regardless of who is governor. Everybody knows it. This “quitate tu pa’ ponerme yo” politics, with everyone (including the police department) stuffing their pockets, has played perfectly into the hands of Wall Street…which played a game of “three-card monte” on the entire island.

Over the past five years, the Big Three rating services on Wall Street  – Fitch,  Moody’s, Dun & Bradstreet – all warned Puerto Rico to “get your act in order.” If this “order” was not established, the rating services would give Puerto Rico the lowest possible credit rating: Junk Bond status.

And so, in 2010, the government of Puerto Rico dutifully laid off 33,000 workers. In 2013, it raised corporate tax rates to 39% and hiked the water rates by 60%:

http://www.nytimes.com/2014/02/09/us/economy-and-crime-spur-new-puerto-rican-exodus.html?_r=0

Also in 2013, islanders paid double the average electricity costs of the rest of the US, at 29 cents per kilowatt:

http://www.forbes.com/sites/richardfinger/2013/12/01/default-puerto-ricos-inevitable-option/

The government also raised the retirement age, demanded higher worker contributions, and lowered government pensions and benefits:

http://www.reuters.com/article/2013/04/05/puertorico-debt-pension-idUSL2N0CS0KG20130405

On July 1, 2015, the government now adds an 11.5% sales tax.

It even proposed a tax on every fat child in Puerto Rico.

Now get ready, for the three-card monte:

Despite all these fiscal austerities…despite raising taxes, reducing pensions, and laying off 33,000 workers…despite doing everything that Wall Street asked… the government of Puerto Rico had its debt demoted to “Junk Bond” status

The three rating services pulled a last-minute three card monte trick on Puerto Rico, and kicked the island’s credit rating into the gutter.  Because of this, the public debt of $73 billion will translate into a per capita debt $20,278, and a debt of $168,471 for every person in the workforce – when you add interest payments and other debt service costs.

http://www.usnews.com/opinion/economic-intelligence/2015/03/11/puerto-ricos-agencies-dont-need-chapter-9-bankruptcy

This “Junk Bond” status – a bait and switch tactic by the three rating services – is the latest Wall Street hustle. It is the latest US tax on Puerto Rico.

 It will be paid by every Puerto Rican on the island. It is part of the reason that so many Puerto Ricans are leaving the island.

 

Governor Garcia Padilla’s Speech

Governor Garcia Padilla may also be playing “three-card monte” with the people of Puerto Rico.  His televised speech on June 29, 2015, called for “shared sacrifice” from all Puerto Ricans, and “concessions” from the island’s creditors. This all sounds wonderful but – especially in politics – the devil is in the details.

Towards the end of the speech, he mentioned the possibilities of “service cutbacks,”  “public-private partnerships,” and an “oversight board.”  With those words, he planted the seeds for a de facto Financial Control Board, and an invasion of foreign investment of the worst sort: predatory lending.

Here is how.

The Governor’s speech is just that…a speech. But its policy underpinnings, the specific goals and objectives behind that speech, are laid out in great detail in this document: The Krueger Report on Puerto Rico.

The Krueger Report
Krueger Report

Here is the Krueger Report:

http://recend.apextech.netdna-cdn.com/docs/editor/Informe%20Krueger.pdf

This report is very dangerous.

On page 17, it recommends ending the minimum wage in Puerto Rico, or a reduction to 1/3 of the $7.25 federal standard: in other words, a minimum wage of $2.42 per hour.  It also recommends a cut in overtime, vacation and bonus pay, and “relaxing labor laws for youth/new entrants for the first few years.”

On that same page 17, the report recommends a cut in Medicaid, federal welfare payments, and federal housing benefits.

Page 20 recommends a property tax hike, and lowering the number of teachers in Puerto Rico.

Page 22 recommends the establishment of an “Oversight Board” from “inside and outside the Commonwealth,” with “special powers to enforce approved budgets.”

If this is where we are headed…then George Orwell is alive and well in Puerto Rico, and Governor Garcia Padilla is Big Brother. With a freshly scrubbed face, sincere gaze, and a mellow voice, he talks to us about our children, and a brighter future for Puerto Rico…and it’s all political doublespeak.

The Krueger Report is a pogrom: a systematic plan for evicting the people of Puerto Rico from their own island. No minimum wage, child labor, scarce federal benefits, property tax hikes, fewer teachers, and an “Oversight Board” with people from “outside” the island, with “special powers” to make sure that it all happens.

With supernatural accuracy, the Krueger Report has a perfect title. Freddy Krueger, the movie villain, killed people while they slept. If Puerto Rico goes to sleep, this Krueger Report will kill them.

The Greece-Puerto Rico Connection: IMF

Collectively, the three co-authors of the Krueger Report worked for the International Fund (IMF) for 63 years. Anne Krueger was an IMF deputy managing director, and the chief economist for the World Bank. One of her co-authors, Mr. Ranjit Teja, is currently the Deputy Director of the IMF European Department.

In Europe, the economy of Greece is falling part because today, June 30, Greece failed to make a loan repayment of €1.55 billion ($1.73 billion) to the IMF.

In other words the same financial organization, and the same exact people (i.e., Mr. Ranjit Teja) that are throwing the Greek economy into the toilet, are the ones that wrote Gov. Garcia Padilla’s “financial plan” for Puerto Rico!

On what planet does Gov. Garcia Padilla live?  Does he have a Swiss bank account somewhere?  Surely there must be an explanation, for unleashing Freddy Krueger in Puerto Rico.

Once Freddy finishes with Greece, he’ll be feasting on Puerto Rico.

10 Comments on “Greece, Puerto Rico, and the IMF: How Freddy Krueger will kill Puerto Rico

  1. My brother recommended I may like this web site. He used
    to be entirely right. This post actually made my day. You can not believe just how
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    Like

  2. Fe,esperanza…un MILAGRO..y él ahí BENDITO..!!

    Like

  3. I read the report and these people are recommending things that are just absurd. It will not be taken seriously by anyone. They conclude that lowering the minimum wage will be as hard as obtaining chapter 9 bankruptcy but it must be attempted. What sadistic sick mother fucker could even think of those two things at the same time. Chapter 9 is a must and a responsibilty. Then wages should not be lowered, but the government must be down sized with most of the municipalities closed. There is one at every TRAFFIC LIGHT in Puerto Rico WITH AN INCOMPETENT MAYOR…….Garcia Padilla is a brave man who is giving face and in some ways so was Luis Fortuno but Sila Calderon who put her hand in the GDB cookie jar, Acevedo Vila, PEDRO ROSELLO, Rafael Hernandez Colon, Carlos Romero Barcelo and Ruben Berrios and his PIP gang should be HELD ACCOUNTABLE for the tragedy

    Liked by 1 person

  4. Greece and Puerto Rico…..of course…..get ready for the typical one sided-narrow-simplistic-ideological analyses:
    from the Right: “it is *only* their fault….those lazy and disorganized, and too playful Mediterranean-Caribbean cultures!!”
    from the Left: “they are *only* innocent victims of external historical forces of domination”

    Why?

    Liked by 1 person

  5. REPLY TO DR REX COMMENT BELOW:

    Dr. Rex
    June 30, 2015
    Reblogged this on It Is What It Is and commented:
    They call it “Freddy Krueger” but it’s the USA ….. one more time: stealing all that is Puerto Rico! The culture, the economy, the land …. And so much more. But never our pride!!

    Dr. Rex… You may want to re-consider what the definition of pride is within the context of an extensive ( 117 yrs ) colonial rule. How is it, that any people ( a nation ) whom you allege to have had their culture, economy eroded and their land taken from them, have any sense of pride at all? Any nation that allows this to happen to itself, is a “beaten” people. Their pride was self-stripped a long time ago. They didn’t put up a fight then, and they don’t now. The PR’s let it happen. Any self-respecting individual whom as you say, has had all the above significantly altered or completely taken from them, has also had their pride taken from them. You have a distorted view of what ( in the good sense of the word ) pride means. Get off the coquito and wake and smell the Utuado coffee and start seeing things for what they really are.

    Like

  6. There is plenty of blame to go around but when you hire consultants that are associated with the IMF, SP, Moodys and you follow there recommendation and then have the same credit agencies down grade you and making it impossible to borrow I think we do have special interest groups that have a hidden agenda. Of course those government officials and consultants should be held accountable but what good would that do anyone. At this point there is still a possible solution and the Krueger report is not one of them. This was another idiotic mistake by the government. God save us from these morons.

    Like

  7. Irregardless of the report as it reads … it took a while to get where the Island is now. It really started after the Spanish American war when the USA received PR as a bounty of war.
    If you haven’t, I would strongly recommend that you read the book “War Against All Puerto Ricans” …. yes, many have had a hand in the current situation, including many Puerto Ricans without honor, dignity and love of country .. rather love of self and their pockets. But these events were started back in 1898 …. and it was started by the “Big bad Wolf” (the U.S.) who set the wheels in motion.

    Like

  8. Never our Pride? If all this happens what “Pride” will there be to have?

    Like

  9. On the very front page of that report is the following information. Usually, a disclaimer is included at the very end; as when you see an ad for a prescription drug telling you the wonders of it and at the same time they tell you in the quickest, lowest voice possible, how it can also hurt or even kill you.

    “The description of potential fiscal or structural measures set forth herein is not exhaustive, nor should it be viewed as an unqualified recommendation or endorsement of any specific measure, and that there may be compelling policy and other reasons not to adopt such recommendations. The authors acknowledge that any specific recommendation may be impractical or impossible to implement for a variety of reasons and that the authors do not possess all of the information that may be relevant to the consideration of any specific measure. Any statements contained in this report, whether forward-looking or historical, are not guarantees of future performance and involve certain risks, uncertainties, estimates and assumptions made in this report. The economic and financial condition of the Commonwealth and its instrumentalities is affected by various financial, social, economic, environmental, and political factors. These factors can be very complex, may vary from one fiscal year to the next, and are frequently the result of actions taken or not taken, not only by the Commonwealth and its agencies and instrumentalities, but also by entities such as the government of the United States. Because of the uncertainty and unpredictability of these factors, their impact cannot be included in assumptions in this report. Future events and actual results may differ materially from any estimates, projections or statements contained herein. Nothing in this report should be considered as an express or implied commitment to do or take, or to refrain from taking, any action by the Commonwealth, the GDB or any government instrumentality in the Commonwealth.”

    I read the full report; and the inference in this posts that Puerto Rico is basically an innocent victim in this situation is ludicrous. There’s PLENTY of guilt to go around, and needless to say, a LOT of the same problems would still be present even if the “Big bad Wolf” (the U.S.) was not involved. Puerto Rico will HAVE to come to grips with the reality that it bears a HUMONGOUS chunk of responsibility in its current predicament. You just can’t cover the sun with your thumb anymore.

    Liked by 1 person

  10. Reblogged this on It Is What It Is and commented:
    They call it “Freddy Krueger” but it’s the USA ….. one more time: stealing all that is Puerto Rico! The culture, the economy, the land …. And so much more. But never our pride!!

    Like

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