RADIO: Puerto Rican default & impact on US economy

Originally aired live on Radio Sputnik. Here the live interview here.  Description below. “Puerto Rico has defaulted for the first time in its history. On Monday the island that is […]

Originally aired live on Radio Sputnik.

Here the live interview here.  Description below.

“Puerto Rico has defaulted for the first time in its history.

On Monday the island that is under jurisdiction of the US failed to pay back its $58-million debt to creditors of its Public Finance Corporation.

Puerto Rico has been long struggling with about $70 billion in total outstanding debt, and its economy in a deep recession.

However, there is no law that allows Puerto Rico to announce bankruptcy. And the US Treasury Secretary Jack Lew already claimed that the federal government won’t bail out the island.

Economists believe that the default will hardly have spillover effects on the US economy, but it’s already hitting ordinary people.

Puerto Ricans are massively leaving the island in search of jobs and stability. As of today the population of Puerto Rico is estimated as 3,5 million. According to the statistics released in August 2014, every year at least 50,000 of them are heading for the US mainland.

Analysts predict that more Puerto Rico residents are likely to leave the island in the near future, which means fewer tax revenues and even weaker potential for growth.”