Puerto Rican Problem
11/14/2013 | | econ70, Economic forecasting, economist on radio, economist on TV, eisenberg and economics, Eisenberg and housing economics, Eisenberg and public speaking, Elliot eisenberg, funniest economist, funny housing economist, Graphsandlaughs, graphsandlaughs and eisenberg, housing sales, MLS, mortgage banking, Multiple listing service, politics and economics, Public speaking economist, Puerto Rican Bonds, Puerto Rico default
Since special federal manufacturing tax breaks were eliminated in 2006, Puerto Rico’s economy has shrunk by 16% and its population by almost 4%. Worse, with $70 billion in bonds outstanding (more than all but NY and CA) there is fear PR may default. With a debt/personal income ratio of an amazing 89%, compared to 10% for Hawaii (the worst of all 50 states), it’s no surprise PR bonds yield 9%!