2016 Economic Projections

By Michelle Seiler-Tucker

First things first: Puerto Rico is turning into America’s Greece. The island territory is laden with debt it can’t pay, and what’s worse, Americans are the ones holding the receipts. About 50% of Americans over the age of 40 hold Puerto Rican debt in some way in California, New York, and Florida; nearly 100% of the over 40 population is exposed in some way. Puerto Rico’s debt comes from a laundry list of issues: over 60% of its population is on Medicare or Medicaid, importing energy is wildly expense, and, not unlike Greece, its government can be rather stubborn. The way I see it, no one knows what Puerto Rico will do, but the options are: 1) default (this is bad for everybody; 2) The U.S. grants Puerto Rico the ability to declare Chapter 9 bankruptcy; or 3) The U.S. gives Puerto Rico a $70+ billion bailout package. None of this will go well for anyone, and frankly there is no way to tell what will happen; but we will see a decision in 2016, and it could put a dent in the U.S. economy. [more...]