“There may be an issue of liquidity in the short term”, in Puerto Rico, “but the debt itself, in global terms, is sustainable”, said Claudio Loser, the chief executive of Centennial Group Latin America, which will officially release its report Monday morning. It claims that education expenditures increased 39 percent, or $1.4 billion in the past decade, while total school enrollment has declined by 25 percent. Combined, they hold $5.2 billion of the U.S. commonwealth’s government-backed bonds.
The White House has said it is not considering a federal bailout of Puerto Rico.
The group of 34 hedge funds hired former global Monetary Fund (IMF) economists to come up with a solution to Puerto Rico’s debt crisis after the island’s governor declared its $72bn debt “unpayable” – paving the way for bankruptcy.
The current situation has drawn comparisons to debt crises in places like Greece and Detroit, and prompted criticism of ongoing U.S. colonial domination on the island. The plan also calls on Washington to invest in health care and clean energy development, approve legislation granting Puerto Rico a bankruptcy option and amend the Jones Act.
Lew’s statement comes as Congress prepares to take off for summer recess and as the chances of default are rising.
Mayor de Blasio and City Council Speaker Melissa Mark-Viverito – side by side for the second day in a row after a rift last week over Uber – joined Puerto Rican advocates for a rally at City Hall Tuesday calling for the feds to step up and help.
“Three-and-a-half million of our fellow citizens are right now threatened by a crisis – a crisis largely created by mistakes of federal policy that now has to be corrected by federal action”, de Blasio said.
Entitled For Puerto Rico, There is a Better Way, the report urges the government to increase tax collection and then use this money to pay back creditors while at the same time severely slashing public programs-particularly education-and privatizing assets and industries.
“What you do for us on the island will be reflected on what we do for you in the next election”, she said.