Puerto Rico On Brink of Crisis

And today’s Latin American collapsing country is Puerto Rico.

Puerto Rico’s Government has literally run out of money and can’t pay salaries: “Government closed schools and suspended other nonessential public services on Monday after last-minute bargaining failed to yield a budget deal”, Reuters reported

The reason behind the budgetary crisis is all but a secret: Government
employs 30% of the island work force. Payroll represents more than 80% of government spending.

Since one out of three Puerto Ricans is employed by Government, the potential economic effect of a shut down would be devastating.

Observers expect the crisis to be solved in a matter of days. They reckon Government will resort to taxation and borrow money to keep going.

Hopefully this crisis will help the case for restructuring.