Section 2

Explosion of the Debt Crisis

The origins of Puerto Rico’s $72 billion debt, and various resolutions local and federal governments pursued to alleviate it.

The origins of Puerto Rico’s $72B debt

are explained in this section, and the various resolutions that the local and federal governments pursued to alleviate it. In terms of the debt’s origins and legality, the Puerto Rican government’s money mismanagement is discussed, as well as the colonial economic system’s sanction of “vulture” hedge funds to prey on Puerto Rico.

Many authors consider the ways in which different solutions are shaped and limited by Puerto Rico’s relationship with the United States. These solutions include filing for bankruptcy, renegotiating the debt, austerity measures, and a transformation of the Island’s political status. The Public Law 7, which allowed the firing of more than 17,000 government employees, was one of the first policies of austerity imposed by the Puerto Rican government to alleviate the economic crisis.  A portion of texts in unit 1 examines the effects of this law, including the further exacerbation of the Puerto Rican economy.

Eventually, the debt led to the imposition of the Fiscal Oversight Board, whose determinations cannot be challenged by the Puerto Rican government. One subsection explores the PROMESA bill, the Board that it empowered, the members of the Board, and their exorbitant salaries. Furthermore, since Puerto Rico did not have a bankruptcy process in place, Title III under PROMESA represents a quasi-Chapter 9. Unit 5 expands on the bondholders’ unwilling negotiation that led to Title III and the consequences of this policy, such as loss of local control.

“La Medicina Amarga:” the Unleashing of Austerity

Yarimar Bonilla and Rafael Boglio Martínez, “Puerto Rico in Crisis: Government Workers Battle Neoliberal Reform,” NACLA Report on the Americas (2010).

Ley 7 fue adversa para la economía,” Primera Hora, April 19, 2011.

Argeo Quiñones, “Crisis y perspectivas en economía de Puerto Rico/2010,” 80 Grados, October 28, 2010.

Victor Rodríguez Domínguez, “Puerto Rico: The Invisible and Recurring Social Struggles in the Oldest Colony in the World” Dissident Voice June 21, 2010.

PRIMARY SOURCES AND MULTIMEDIA

Ley Especial Declarando Estado de Emergencia Fiscal y Estableciendo Plan Integral de Estabilización Fiscal para Salvar el Crédito de Puerto Rico,” Ley Núm. 7 del año 2009, (P. de la C. 1326).

FURTHER READING:

Ricardo Benassi, “Puertorriqueños contra despidos masivos,” BBC Mundo, October 16, 2010.

Marisol LeBrón, “Policing Solidarity: State Violence, Blackness, and the University of Puerto Rico Strikes,” Souls: A Journal of Black Politics, Culture, and Society (2015).

Firuzeh Shokooh Valle, “Puerto Rico: Ready for the National Strike,” Global Voices, October 13, 2009.

Film: La generación del estanbai en Puerto Rico (documental sobre la precariedad laboral) by Juan C. Dávila

“The Death Spiral”

Michael A. Fletcher and Steven Mufson, “How Washington helped create Puerto Rico’s staggering debt crisis,” Washington Post, July 9, 2015.

Ed Morales, “The Roots of Puerto Rico’s Debt Crisis—and Why Austerity Will Not Solve It,” The Nation, July 8, 2015.

Luis Gallardo Rivera, “What Exactly is Going on in Puerto Rico?,” La Respuesta, July 21, 2015.

Ismael García-Colón and Harry Franqui-Rivera, “Puerto Rico Is NOT Greece: The Role of Debt in US Colonialism,” FocaalBlog, August 26, 2015.

Marian Díaz, “Expertos urgen combatir la desigualdad.” El Nuevo Día, May 15, 2018.

Eduardo Lalo, “La última vez,” El Nuevo Día, May 19, 2018.

José Nicolás Medina Fuentes, La deuda odiosa y la descolonización de Puerto Rico, CreateSpace, 2017.

PRIMARY SOURCES AND MULTIMEDIA:

Debt,” Radio Ambulante, December 20, 2016.

Juan González on How Puerto Rico’s Economic ‘Death Spiral’ is Tied to Legacy of Colonialism,” Democracy Now, November 26, 2015.

Puerto Rico Underwater,” Latino USA, February 5, 2016.

Julio González “The Crisis of Puerto Rico explained in 5 graphs” Global Politics and Law April 22, 2017

FURTHER READING:

Facultad de Derecho de la Universidad Interamericana de Puerto Rico, “Deuda Pública, Política Fiscal, Y Pobreza En Puerto Rico” (2016).

José Nicolás Medina Fuentes, La deuda odiosa y la descolonización de Puerto Rico, CreateSpace, 2017.

Deep Debt, Wall Street Wealth

Mary Williams Walsh “The Bonds that Broke Puerto Rico” New York Times June 30, 2015

Natasha Lycia Ora Bannan, “Puerto Rico’s Odious Debt: The Economic Crisis of Colonialism,” CUNY Law Review (2016).

David Dayen, “How Hedge Funds Deepen Puerto Rico’s Debt Crisis,” The American Prospect, December 11, 2015

Jonathan Mahler and Nicholas Confessore “Inside the Billion-Dollar Battle for Puerto Rico’s Future,” New York Times, December 19, 2015.

Jennifer Wolff, “Debtors’ Island: How Puerto Rico Became a Hedge Fund Playground,” New Labor Forum, March 29, 2016.

Rafael Bernabe, “El régimen de los acreedores y la crisis de la deuda,” 80 Grados, August 21, 2015.

Joel Cintrón Arbasetti y Carla Minet, “Mapa de los protagonistas del juego de la deuda de Puerto Rico y sus posiciones,” Centro de Periodismo Investigativo, July 23, 2015.

Joel Cintrón Arbasetti, Carla Minet, Alex V Hernandez and Jessica Stites “100 Years of Colonialism: How Puerto Rico Became Easy Prey for Profiteers” In these Times, November 12, 2017

José Nicolás Medina Fuentes, “Deuda pública odiosa colonial: la flecha dirigida al Minotauro norteamericano,” 80 Grados, June 2, 2017.

FURTHER READING:

Pirates of the Caribbean: How Santander’s Revolving Door with Puerto Rico’s Development Bank Exacerbated a Fiscal Catastrophe for the Puerto Rican People,” HedgeClippers, December 13, 2016.

Michelle Chen, “The Bankers Behind Puerto Rico’s Debt Crisis,” The Nation, June 8, 2017.

Saqib Bhatti and Carrie Sloan, ReFund America Project, “Puerto Rico’s Payday Loans” (2016), “Scooping and Tossing Puerto Rico’s Future” (2016),  and “Beware of Bankers Bearing Gifts: Wall Street Sold Puerto Rico Billions in Predatory Loans Disguised as Gifts” (2017).

Ed Morales, “How Hedge and Vulture Funds Have Exploited Puerto Rico’s Debt Crisis,” The Nation, July 21, 2015.

PROMESA and Imposition of a Fiscal Control Board

Alyosha Goldstein, “Promises Are Over: Puerto Rico and the Ends of Decolonization,” Theory & Event (2016).

Marisol LeBrón, “People Before Debt: Puerto Ricans Confront the Island’s Debt Crisis From Below” NACLA Report on the Americas (2016).

Ed Morales, “The Technocratic Takeover,” Jacobin, September 13, 2016.

Carla Minet and Joel Cintrón, “Banqueros e inversionistas a la Junta de Control Fiscal” 80 Grados, July 1, 2016.

Roberto Alejandro Rivera, “La Junta de Control y sus laberintos,” 80 Grados, June 10, 2016.

Anibal Acevedo Vilá “Sueldo incompetente y negligente para Jaresko” El Nuevo Día March 31, 2017.

Detroit paid less for the Manager of their Board” Noticel March 31, 2017

PRIMARY SOURCES AND MULTIMEDIA:

PROMESA Bill, H.R.4900, 114th Congress (2016).

Spanish translation of PROMESA Bill by Dr. Alejandro Álvarez Nieves (2016).

Congressional Research Service Report on PROMESA (2016)

Website of the Puerto Rico Oversight Board

La Junta de Supervisión Fiscal aprueba el presupuesto con condiciones,” El Nuevo Día, June 2, 2017.

HANDOUTS:

Yarimar Bonilla Ramos, Fabiola Meléndez Olmo, Dayanira Moya Pérez, Jose Franqui Vazquez, and Naomi Raíces López, “Puntos Importantes de la Ley PROMESA” (2016).

Unidos Contra Promesa, “La Promesa: Una Guía Rápdia para entender la crisis económica en Puerto Rico/ A quick guide to understand Puerto Rico’s economic crisis” handout (2017)

Campamento Contra La Junta, “PROMESA para Principiantes” handout (2016)

Campamento Contra La Junta, “Conoce a los 7 gobernadores no electos de Puerto Rico” (2016)

VIDEO: UPRRP TV, “Junta de Control Fiscal, ¿Por qué y cómo nos podría afectar?” (2016).

“La Quiebra:” Puerto Rico files for Title III

Colin Dwyer “Puerto Rico Makes Unprecedented Move To Restructure Billions In Debt” NPR News, May 3, 2017.

“Puerto Rico hace historia al acogerse a un mecanismo de quiebra para su deuda” RCNradio.com, May 3, 2017.

Kurt A. Mayr “A Territory in Uncharted Territory, the Commonwealth of Puerto Rico Files for Bankruptcy Protection” The National Law Review, May 3, 2017.

Puerto Rico vs Detroit: What’s different?,” Reuters, May 3, 2017.

Juan Lara “La deuda se negociará en el tribunal” El Nuevo Dia, May 3, 2017.

Joanisabel González and José A. Delgado “Territorial bankruptcy court to sit in San Juan” El Nuevo Dia, May 6, 2017.

“Puerto Rico bonds trade higher in wake of petition filing” Reuters, May 3, 2017.

FURTHER READING:

Mary Williams Walsh “Puerto Rico: A Debt Problem That Kept Boiling Over,” New York Times, May  5, 2017.

Michael Corkery and Mary Williams Walsh “Message of Puerto Rico Debt Crisis: Easy Bets Sometimes Lose,” New York Times,  May 4, 2017.

Vann R. Newkirk II, “The Historical Exclusion Behind the Puerto Rico Bankruptcy Crisis,” The Atlantic, May 2, 2017.

Edwin Meléndez, “Bankruptcy does not absolve Congress of responsibility to Puerto Rico,” The Hill, May 8, 2017.

Juan González, “Puerto Rico’s $123 Billion Bankruptcy is the Cost of U.S. Colonialism,” The Intercept, May 9, 2017.

COFINA and the Proposed Commonwealth Debt Adjustment Plan

Little Sis: Public Accountability Initiative. “Debt Island: Wall Street Closes in on 40 Years of Profit at Puerto Rico’s Expense.” Little Sis, January 2019.

Mary Williams Walsh and Karl Russell. “$129 Billion Puerto Rico Bankruptcy Plan Could Be Model for States.” The New York Times, September 27, 2019.

The Struggle Over Pensions and a Dignified Retirement

NotiCel. “Manifestantes Despiertan a José Carrión y Wanda Vázquez con Protestas.” NotiCel, September 30, 2019.

Sarina Dorna-Pesquera. Las Pensiones y las Opciones80grados, October 4, 2019.

Public Accountability Initiative and Constryamos Otro Acuerdo. The Puerto Rico Pension Heist. 2019.