Comments on: The push and pull over Puerto Rico’s budget Bridges, budgets, bonds Mon, 24 Nov 2014 00:29:08 +0000 hourly 1 By: CraigL Fri, 02 May 2014 00:00:36 +0000 No one can turn a moving ship on a dime. We can only salute Mr. Padilla and his team for devising and proposing what they did. As investors, we should be rooting for their success instead of constantly forecasting PR failure.
Just look at the mainland US budget. Any downpayment of debt whatsoever? Nope. Any *accelerated* downpayment of debt? You must be kidding!
The US interest payments on debt are just over 6%, but only because “By comparison, debt service was more than 15% of federal outlays in the mid-1990s; the share has fallen partly because lower rates have held down interest payments, but also because outlays have risen substantially: up 39.4% over the past decade.”
So, the mainland has a lower % outlay only by “printing” more money and spending like crazy on other things, a luxury PR certainly does not have.