How To Erase Puerto Rico’s Debt Without Hurting Mom And Pop


By Ellen Brown for Web of Debt. During his visit to hurricane-stricken Puerto Rico, President Donald Trump shocked the bond market when he told Geraldo Rivera of Fox News that he was going to wipe out the island’s bond debt. How did the president plan to pull this off? Pam Martens and Russ Martens, writing in Wall Street on Parade, note that the U.S. municipal bond market holds $3.8 trillion in debt, and it is not just owned by Wall Street banks. Mom and pop retail investors are exposed to billions of dollars of potential losses through their holdings of Puerto Rican municipal bonds, either directly or in mutual funds.

Puerto Rico Needs More Hurricane Relief Now ― And New Deal With Debt Relief

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By Mark Weisbrot for Buzz Feed News – More than 40 percent of Puerto Rico is without clean water, and the vast majority has no electricity. Many hospitals and operating rooms are not functioning, and the threat of a public health crisis looms. On Wednesday, 145 members of Congress took the unusual step of writing to President Trump and asking for more Department of Defense resources to be immediately deployed. Puerto Ricans are US citizens, and Puerto Rico is legally entitled to the same federal relief and reconstruction aid as Texas or Florida. But Puerto Rico is also an “unincorporated territory” of the United States ― or, as many would say, a colony. Although Puerto Ricans can be drafted to serve in the US military, and are subject to other obligations of US citizenship, they do not have voting representation in the US Congress. Therein lies the problem: Puerto Rico’s political status not only prevents these US citizens from securing their legal rights, but even worse, it allows them to be treated very badly, over and over again, and not have the sovereignty to chart a different course. That different course is desperately needed, because if Puerto Rico is to have a future, it will need a whole new economic plan that allows it to recover. This would include, at a minimum, the cancellation of most of its debt, which is not going to be paid in any case.

Government Debt Is Not The Problem

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By Dean Baker for Counter Punch – Deficit fears are impoverishing our kids. The people complaining about budget deficits fundamentally misrepresent how the economy works and the problems it faces. A deficit is a problem when it creates too much demand, exceeding the economy’s ability to supply goods and services. In this situation, a deficit is likely to lead to higher interest rates and inflation, which reduce investment. Less investment means less productivity growth, which means we will be less wealthy in the future. Ever since the 2007–09 recession, the problem has been the opposite: too little demand. Millions of workers have gone unemployed because there was not enough demand for their labor. In a weak economy, companies invest less. In a period of weak demand, it is virtually costless for the government to spend in areas that will not only employ people but also increase long-term productivity and spending on infrastructure, research and development and such areas as quality preschool, which pays enormous long-term dividends. Deficit fears prevented the government from spending the money needed to bring the economy back to full employment. That was costly in the short term because it meant millions of workers went unemployed, but it was also very costly in the long term.

If China Can Fund Infrastructure With Credit, So Can We


By Ellen Brown for the Web of Debt Blog. United States – May 15-19 has been designated “National Infrastructure Week” by the US Chambers of Commerce, the American Society of Civil Engineers (ASCE), and over 150 affiliates. Their message: “It’s time to rebuild.” Ever since ASCE began issuing its “National Infrastructure Report Card” in 1998, the nation has gotten a dismal grade of D or D+. In the meantime, the estimated cost of fixing its infrastructure has gone up from $1.3 trillion to $4.6 trillion. While American politicians debate endlessly over how to finance the needed fixes and which ones to implement, the Chinese have managed to fund massive infrastructure projects all across their country, including 12,000 miles of high-speed rail built just in the last decade. How have they done it, and why can’t we?

Number Of Americans Defaulting On Student Loans Reaches 4.2 Million

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By Philip Andrea and Genevieve Leigh for WSWS – A new analysis released this week by the Consumer Federation of America found that the number of Americans in default on their student loans jumped by nearly a fifth in 2016. Rising 17 percent from 3.6 million in 2015, there are now at least 4.2 million Federal Direct Loan borrowers in default. A borrower is put in default when no payment is made in more than 270 days. In addition to more borrowers defaulting on their loans, both the number of borrowers and the average amount borrowed continues to increase rapidly. The new analysis shows that the total amount of student debt owed adds up to a staggering $1.3 trillion, triple what it was a decade ago. The report also emphasized the relationship between student debt and homeownership. Not surprisingly, it was found that people with student debt have a significantly lower chance of owning a home when compared to graduates without debt, namely those aged 30 to 36. Attaining a college degree has been shown to increase the probability of owning a home, but this statistic still keels to the prospect of debt damaging the borrower’s credit score.

The Student Debt Crisis Is Exploding

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By Kevin Zeese and Margaret Flowers for Popular Resistance. The level of student loan debt has risen to $1.5 trillion and defaults are more than 40% and rising. U.S. student loan debt has grown to overwhelm all other categories of non-housing consumer debt in this nation. Underneath the crisis are rising tuition costs, a predatory student loan industry and an absence of consumer protections for students. What is the student debt movement to do? Of course the Biden bankruptcy protections should be repealed but that is not enough. We need a complete student loan debt forgiveness program. These debts are ill gotten gains and should be forgiven. If the government refuses to forgive these debts, people must rise up together and refuse to pay any student loan debt. The people have the power to end this injustice and must mobilize to do so. A student loan debt jubilee, whether mandated by law or put in place by the people, will bring economic freedom to tens of millions, end their debt servitude and allow them to participate in the economy. It will be a significant economic stimulus, but more importantly it will end an injustice.

Debtors Prison Not A Tale Of Charles Dickens


By Paul Kirk Haeder for Dissident Voice. Constitutional checks and balances were put in place to prevent citizens from succumbing to undue and unfair prosecution, and the courts have upheld many times the right of individuals who have served their time in prison to move on, move ahead. However, times have changed, and there has been a huge push to privatize prisons, and to place filing fees, court costs and even the daily maintenance, upkeep and staffing of these halls of justice on the financial backs of the accused. It’s sometimes called a punishment society, and on top of that, when we start looking at African-Americans and Latinos in this snapshot of Mass Incarceration, we have the respective stats – black men are six times more likely to be incarcerated than white men, and Latinos 2.5 times more. The cost of their crimes also increases with the color of their skin.

How The Payday Loan Industry Is Obstructing Reform

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By Michael J. Sainato for Counter Punch – In June 2016, the Consumer Financial Protection Bureau proposed new guidelines to protect consumers from payday loan traps. These traps help perpetuate the cycle of poverty and prey on individuals in low income communities who are unable to obtain loans from a bank. The multi-billion-dollar payday lending industry has garnered influence with both Republicans and Democrats in order to inoculate itself from legislations and reforms that could potentially hurt its profits.

David Graeber: The Power Of Finance, History Of Inequality & Legacy Of OWS

SEPTEMBER 17, 2012- Occupy Wall Street protesters gather for the one year anniversary of their movement's beginning. (Photo: Glenn Halog)

By David Graeber for ROAR Magazine. So hundreds of thousands suddenly showed up. I mean, we had what — like 800 occupations at peak? Then of course came the evictions and they realize, “oh, I guess we couldn’t after all.” And after that the repression became extremely brutal and the media coverage also shifted to be just completely one-sided. But all that was really just back to normal. So the question is, why was there any sympathetic media coverage at all in those first few months? Why was there this little bubble of democracy? I think in retrospect it’s easy to see: there was a fraction of the establishment, basically the left of the Democratic Party, that thought that we were going to become their version of the Tea Party. That is, a grassroots movement that would make a lot of anti-establishment noises but ultimately play the game of raising money, running candidates again. They tried to infiltrate the media teams, set up tacit leadership structures… But eventually they figured out we were really serious. If our main complaint was that the US political system had turned into a system of legalized bribery, no, we weren’t going to join the system and try to see if we could raise enough bribes ourselves to run candidates and change that from within. Suddenly the curtain went down.

Protests Against 'Colonial' PROMESA Debt Plan Rock Puerto Rico

A protester against the first seminar of PROMESA tries to prevent an attendee from entering the conference in San Juan, Aug. 31, 2016. | Photo: Reuters

By Staff for Telesur. Hundreds of protesters took to the streets in San Juan Wednesday to block the first scheduled conference on the installation of a financial control board to remedy Puerto Rico’s crippling debt crisis but slammed by critics as an anti-democratic, neo-colonial policy that will redistribute wealth from the island nation to Wall Street. Demonstrators formed protests lines and blocked roads with rocks and bricks to disrupt the conference at San Juan’s Condado Plaza Hilton. They carried signs and shouted slogans against the federal control board, whose authority will supercede that of Puerto Rico’s democratically-elected governor, effectively handing budgetary decision-making over to unelected appointees, many of them bankers. The U.S. law creating the control board, known by its acronym PROMESA, grants the oversight panel the power to cut pensions, labor contracts with civil servants, and social services, to restructure its US$73 billion debt load. Despite lines of riot police and occasional use of pepper spray, the protests managed to block conference-goers on their way to the venue and forced organizers to re-arrange the meeting agenda, local media reported.

Will Next Global Debt Crisis Come From Private Investors?

A poster along the streets of Buenos Aires, Argentina, reads "Enough Vultures. Argentina united in a national cause." | Photo: Reuters

By Staff of Telesur – Private creditors have replaced the public sector as lead borrower to developing countries, which has contributed to a new borrowing and lending boom. Private financial institutions are responsible for prompting a potential “new wave” of debt crises among developing nations, according to a new report carried out by European Think Tank Eurodad. Public debt in developing countries is increasingly being borrowed from private lenders, which the authors argue has meant that an increasing portion of credit is not effectively monitored or regulated.

It Is Time To Erase Debts And Restart The Economy, Create Jobs

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By Mike Krauss for Truth Dig – So far, neither Donald Trump nor Hillary Clinton has offered a credible plan to restart the long-stalled U.S. economy. Trump favors lowering taxes to spur demand, a reduction in the supply of illegal foreign labor to boost wages, and modifying trade policy to encourage investment in U.S. manufacturing and create better-paying jobs. He also touts an unspecified infrastructure investment. Some argue that this approach will not provide jobs in the magnitude required, and will likely increase the federal deficit.

Black Flags And Debt Resistance In America’s Oldest Colony

Flickr/ Andrés Díaz

By Max Haiven for ROAR Magazine – Sunday midnight in Santurce, the old downtown working-class neighborhood of Puerto Rico’s capital San Juan which, like seemingly all such neighborhoods around the world, struggles with the uneven brutalities and gifts of gentrification. Old men sit on decaying swivel chairs outside small bars pumping local music, faded newspapers line the insides windows of shops long-shuttered by the island’s ongoing economic crisis. Yet here and there new businesses and experimental social spaces are also flourishing

Strong Rules Needed On Abusive Debt Collection Practices

(Image: Debt Collective)

By Dave Johnson for Campaign for America’s Future – I have been hounded for months by a company attempting to collect money for a gym membership that I canceled more than 15 years ago. I was paying $150 a year for the membership before I correctly canceled the membership in writing. That “fitness center” was bought by a national chain that is known for hounding people for unpaid memberships, even if the membership has been canceled and nothing is actually owed.

Japan: Road To Hyperinflation Or Cure For Debt Deflation?

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By Ellen Brown for Web of Debt – When then-Fed Governor Ben Bernanke gave his famous helicopter money speech to the Japanese in 2002, he was talking about something quite different from the quantitative easing they actually got and other central banks later mimicked. Quoting Milton Friedman, he said the government could reverse a deflation simply by printing money and dropping it from helicopters. A gift of free money with no strings attached, it would find its way into the real economy and trigger the demand needed to power productivity and employment.