- Puerto Rico is facing a $70 billion public debt and a 10-year economic crisis
- The poverty rate is 45% and over 80,000 people have left for the mainland US
- The government has hiked sales taxes and shut down over 150 schools
- Puerto Rico used to have tax breaks that attracted businesses, but Congress got rid of them
- The government issued municipal bonds to pay its bills
- Wall Street loved these bonds and Puerto Rico even wrote into its constitution that certain bondholders would be paid first
- Puerto Rico cannot declare bankruptcy like states can because of a 1984 amendment to a law

- Puerto Rico is facing a dire crisis with massive debt and no access to bankruptcy.
- The government tried to attract wealthy individuals and businesses with tax breaks, but it only created a small number of jobs.
- Puerto Ricans have been suffering from government cuts, including hospitals struggling to stay open.
- Hedge funds, known as vulture funds, now hold a significant portion of Puerto Rican debt.
- Congress is considering a bill to help Puerto Rico negotiate with creditors, but there is a campaign to kill it.
- An attack ad against the bill is misleading and funded by a dark money group.
- UBS, an investment bank, sold risky bonds to Puerto Rican customers, even though its sales force advised against it.
- Puerto Rico needs relief from hedge fund lawsuits and an opportunity to restructure its debt.
- Puerto Rico should be treated as an island of American citizens in need of support.

- The piece emphasizes the urgent need for assistance in Puerto Rico due to the economic crisis caused by misguided loopholes.
- It mentions the involvement of vulture funds lobbying for payout and the lack of options for taxing or cutting expenses.
- The author calls for restructuring and relief measures rather than a bailout.
- The importance of convincing Congress to take action is highlighted.
- The piece concludes with a plea to Paul Ryan and Nancy Pelosi to help Puerto Rico, emphasizing the proximity of the island.

- Puerto Rico is facing a $70 billion public debt and a 10-year economic crisis, resulting in a poverty rate of 45% and mass emigration to the mainland US.
- The government has implemented sales tax hikes and school closures, while also losing tax breaks that used to attract businesses.
- Puerto Rico issued municipal bonds to pay its bills, which were favored by Wall Street, but the inability to declare bankruptcy has worsened the crisis.
- The government's attempts to attract wealthy individuals and businesses with tax breaks have been unsuccessful in creating significant job growth.
- Hedge funds now hold a significant portion of Puerto Rican debt, and there is a campaign against a bill that could help Puerto Rico negotiate with creditors.
- UBS sold risky bonds to Puerto Rican customers, contributing to the debt crisis.
- Puerto Rico urgently needs relief from hedge fund lawsuits and the opportunity to restructure its debt, and should be treated as an island of American citizens in need of support.
- The article emphasizes the need for restructuring and relief measures, rather than a bailout, and highlights the importance of convincing Congress to take action.
- The author concludes with a plea to Paul Ryan and Nancy Pelosi to help Puerto Rico, emphasizing the island's proximity.

Puerto Rico is suffering a massive debt crisis. Lin-Manuel Miranda joins John Oliver to call for relief.

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Puerto Rico, the island that for decades has been marketed to us as a beautiful vacation spot.

This is the Commonwealth of Puerto Rico, a land of song and laughter.

Mmm, coconut milk, a delicious Puerto Rican rum.

It's the revival of an old coconut mask festival at Louisa, just 45 minutes from San Juan.

And how'd you like to see this the morning after?

Did that 1950s narrator just make a sex joke?

Every crazy masked stranger on the island.

But Puerto Rico is an island of 3 and a half million people, and they are currently facing a horror even greater than a demonic slipknot coconut mask.

Puerto Rico is in desperate financial trouble.

Puerto Rico is facing a 70 billion dollar public debt amid a ten-year economic crisis.

Considering the state of our economy, the debt is not payable.

That is bad, Because this is math is 1 of the most dread-inducing sentences in the English language, even when it's uttered at the start of an actual math class.

As foreboding statements go, it's right up there with it'll never grow back and, Mommy, Whiskers has been napping for a really, really long time.

Puerto Rico is currently around $70 billion in debt, and it is wreaking havoc on the island.

Last year alone, over 80,000 people left for the mainland U.S.

Puerto Rico has already shut down more than 150 schools.

In the last few years, the cash-strapped government has dramatically hiked sales taxes from 7 percent to 11 and a half percent, far higher than any in the United States.

Yes, right now, Puerto Rico is like the last tower records.

Everything's overpriced, everyone's being laid off, and there's still a weirdly large number of Ricky Martin CDs.

And remember, Americans have a personal stake here.

Puerto Ricans are American citizens, and they and their descendants include some of our finest judges, both of our laws and our idols.

There's some of our top athletes and our top Guzmans.

Just this week, Just this week, Lin-Manuel Miranda, the son of Puerto Rican parents, won the Pulitzer Prize for Hamilton, the Broadway smash he created and stars in.

And last month, he made a heartfelt plea to Congress on Puerto Rico's behalf.

If I can leave you with anything today, our island is in crisis, and if I can help in any way, if I can get more eyeballs to this crisis, it's a fixable problem.

If Hamilton tickets will help, I'm happy to do that too.

That is incredible, because I'm amazed even he can get tickets.

It is easier for a meerkat to get into Harvard Law School than it is to get into that show.

And quick side note here, Congress should take him up on that.

Have you seen that clip from when he performed a work-in-progress version of the opening song at the White House?

word got around They said, this kid is insane, man ♪ ♪ Took up a collection Just to send him to the mainland ♪ ♪ Get your education Don't forget from whence you came ♪ ♪ And the world is gonna know your name What's your name, man?

So, how did we get to the point where members of Congress are being offered Broadway tickets to save Puerto Rico?

Well, much of it has to do with the fact that, as we have talked about before here, Puerto Rico is not a state, but rather, as a 1901 Supreme Court case stated, it is a territory that is foreign to the United States in a domestic sense.

Which sounds like what a liquor store clerk says to try and sell surplus cases of Miller High Life.

Oh, you're looking for a quality foreign beer?

I'd call this foreign in a domestic sense.

And look, we don't need to settle tonight the question of Puerto Rican statehood.

That is a complicated issue on which many Puerto Ricans themselves disagree.

But 1 thing is for sure, because it's a territory, many laws that apply to the states have loopholes concerning Puerto Rico.

And as you will see time and time again in this piece, those little legal quirks have had massive consequences.

And let's start with a quirk many Puerto Ricans liked, something called Section 936.

It gave tax breaks to encourage businesses that would otherwise have moved overseas to move to Puerto Rico, and it worked.

Government helped attract business to Puerto Rico by granting generous tax breaks.

That led to a booming manufacturing sector, particularly pharmaceutical companies.

At its peak, the island was home to 89 drug manufacturing plants.

All of a sudden, Puerto Rico was a pharmaceutical paradise.

At its peak, the small city of Barceloneta even housed 14 pharmaceutical and other plants, including 1 that produced Viagra.

And that Viagra plant was such a source of pride that the town's mayor has said, we're responsible for a lot of good moments.

-...one step away from outright changing the town's motto to, Barcelona-ta, you're welcome for that bonus.

Now, unfortunately for Puerto Rico, Congress got rid of those tax breaks to offset a tax cut on the mainland, phasing them out completely by 2006.

Recession, Puerto Rico lost over half its manufacturing jobs, putting its economy into a flaccid state that no amount of Viagra could fix.

And to pay its bills, the government started issuing tons of municipal bonds.

And a municipal bond is basically an IOU.

Puerto Rico borrows money from someone, promising to pay it back later with interest.

And for years, people lined up to buy those bonds because, thanks to some other quirks in the law, they were very attractive.

Congress decided bonds from Puerto Rico would be triple tax exempt.

Those who buy them don't have to pay federal, state, or local taxes on the bonds.

The money you earned on them was triple tax exempt.

Because double fudge is shit, and quadruple fudge doesn't even exist, because what would the fourth fudge be?

Now, Wall Street loved those tax breaks, as well as the fact that thanks to yet another legal quirk that they themselves lobbied for, they could stash tons of bonds in funds without putting Puerto Rico in the name.

You might even own Puerto Rican bonds and not even know it.

Oppenheimer's Maryland municipal fund, for instance, is made up of 50.4% Puerto Rico bonds, which is insane, because if you are more than half something, that is what you should be called.

Even Taco Bell makes sure their ground beef is less than 50% squirrel lips.

And that's because, as we all know, the rest is a combination of raccoon dicks and weasel knees.

And yet, Puerto Rico even went a step further to entice Wall Street, writing into its constitution language suggesting that certain bondholders would be paid first ahead of anything else, including funding basic government services.

But if you called 911, you would not expect them to say, oh, I'm sorry, we chose to send our fire truck money to Beijing, have you tried blowing on the fire really hard?

And it's provisions like that that kept the money flowing in.

And, as their former governor puts it, Puerto Rico got hooked.

They were extremely attractive in the marketplace, and Puerto Rico actually got addicted, I would say, to it.

And, and, so it was a lot easier to just go out and barrow as opposed to making tough decisions.

Yeah, and that is absolutely true, but you were the governor for many of those years.

So, hearing you complain about addiction is like hearing Keith Richards complain about the Rolling Stones drug problem.

You're the only Rolling Stone whose blood was a controlled substance!

And there was 1 more quirk here, which made Puerto Rico a time bomb.

Because unlike states, Puerto Rico cannot authorize what's called Chapter 9 bankruptcy, which is huge.

Because think about that, if you are massively in debt and you can't declare bankruptcy, you are stuck.

And this happened because of a tiny amendment to a law in 1984.

And the crazy thing is, no 1 can say why it was written.

It's interesting to note that Chapter 9 applied to Puerto Rico from 1933 to 1984.

And then mysteriously, for some reason, Puerto Rico was exempt from Chapter 9.

A provision was stuck into a larger bill with no explanation or debate.

There is no legislative history to explain why Puerto Rico was singled out.

So the next time your obnoxious friend tells you everything happens for a reason, you can simply say, no, Dan, not the 1984 provision exempting Puerto Rico from bankruptcy protection, so shut the f*** up!

We even tried to find out ourselves why that amendment got attached.

We knew Strom Thurmond had proposed it, so we asked an archivist at the library where his papers are kept to go through the relevant papers, and they came up with nothing.

Which might actually be the best case scenario there, because usually when it comes to Strom Thurmond, the answer to the question, where did this come from, is either his testicles or fervent racism.

So, at this point, with massive debt that it's promised to pay ahead of government services and no access to bankruptcy, Puerto Rico was fucked.

But wait, because we're only getting started here.

Because 4 years ago, in an attempt to turn things around, they embarked on a disastrous plan to lure in wealthy individuals and small businesses by, among other things, exempting them from capital gains taxes.

Which, you have to admit, is pretty good rich people bait.

It's right up there with tiny dogs in bags and big, dumb, round ice cubes.

-...they're colder when they're round, you know.

The government even created a video to sell mainlanders on moving, featuring a businessman talking in spectacularly condescending tones about how unexpectedly civilized life in Puerto Rico is.

What we found, first of all, was a thriving business community.

Established, solid, like the United States.

In terms of family, I must say I was skeptical at first, but in the end, the island has everything you might need.

I visited schools and wow, top level in English.

I saw living alternatives up to our standards.

There's so many little treasures you want to explore, complimented with all the comforts, the necessities you and your family are accustomed to.

That level of colonial tone makes me cringe, and I'm f-ing English!

The buildings had roofs, the cars had wheels on them, but wait, they also had indoor plumbing and the printed word.

LAUGHING But while those tax breaks were part of a plan to create 50,000 jobs in 18 months, A study later found they only directly created 5,800.

If an ER doctor told you, congratulations, we got 12 percent of the GI Joe out of your rectum, you would not consider that a job well done.

yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah ♪

And while those who relocated have gotten out of paying around $420 million in taxes, Puerto Ricans have been suffering the effects of savage government cuts, including hospitals literally struggling to keep the lights on.

Puerto Rico's sad problem has gotten so dire, the power authority cut off a hospital that's behind on its bill.

The electric power authority did at least wait until surgeries were done for the day today before pulling the plug.

I guess it's only the people on life support that have to worry about the switch to bicycle power generators.

-♪ ♪ -♪ And with working conditions like those, is it any wonder that apparently, at least 1 doctor a day leaves Puerto Rico.

That is an attrition rate rivaling that of Grey's Anatomy.

And the truly tragic thing here is, Puerto Rico may soon need those doctors more than ever.

Health officials are worried as they expect the Zika virus to infect 1 in 5 people in Puerto Rico.

The island of Puerto Rico has already seen 450 confirmed cases of the virus that's been linked to severe birth defects.

On top of debt, industrial collapse, school closures, and a sudden influx of tax-dodging arseholes, now Puerto Rico has to worry about deadly mosquitoes.

It's like the island is being hit with all the plagues that God felt were too finky for the Bible.

-♪ ♪ -(?) And this is clearly a moment where Puerto Rico could rightly cry out to its creditors for mercy.

However, a lot of its creditors are now hedge funds, who traditionally thrive on this kind of chaos.

Hedge funds often invest in debt-ridden economies, buying up bonds at low prices and looking to flip them for quick profits.

The strategy has earned them a reputation among critics as so-called vulture funds.

As much as 30% of Puerto Rican debt is now held by vulture funds.

And if you are alone in the desert, and see vultures perched above you, your first thought is never, -"Oh, thank God, the vultures are coming to help!" -$1.5 million -$1.5 million.

And these vulture funds have lived up to their name, with a group of them producing a report last year titled, For Puerto Rico, There's a Better Way.

Suggesting budget cuts, like cutting excess Medicaid benefits and reducing the number of teachers on the island.

So, shaving money out of medicine and education is your better way.

Well, at least have the intellectual honesty to then change the title of your report to, -"Hey, Puerto Rico, fuck you, pay me." -$25,000 -$25,000.

Now, the good news here is, Congress is currently considering a bipartisan bill that would give Puerto Rico some breathing room to negotiate with creditors.

And the details are still being worked out, but if this is done well, it could be a real help to Puerto Rico.

Unfortunately, there is now a coordinated campaign to kill it.

A bailout on the backs of savers and seniors.

Tell Congress, stop the Washington bailout of Puerto Rico.

Okay, everything you just saw was bullshit.

First, it's not a bailout, no 1 is suggesting a cash infusion.

Second, that ad wasn't paid for by Savers and Seniors, but by the Center for Individual Freedom, who spent nearly 2000000 dollars on ads like that.

They are a dark money group, so it's impossible to say where that money came from.

Even the sad old people featured in that ad are bullshit because they're all stock footage models.

And if you let the stock footage of the man with the mustache play out, He's not even sad because he starts...

Look, hey, stock footage man, you've been used in a manipulative attack ad.

And this is not to say that regular bondholders have not been hurt.

In fact, some Puerto Rican bondholders may have got the worst of this, thanks to 1 more quirk.

Because some of the bonds were underwritten by the investment bank UBS, which sold them to 1 of its own divisions, essentially selling them to itself.

UBS then offloaded those bonds onto Puerto Rican customers, even though its own sales force felt they were so risky, they came up with a list of 22 reasons not to sell them.

If a waiter at Bennigan's says she has 22 reasons she doesn't feel comfortable selling you the Cobb salad, you listen to her, and you go across the street to a fucking sizzler.

Now, UBS says they did nothing wrong, and technically, they're right.

I mean, sure, UBS should never have been able to sell those bonds to themselves.

It's actually illegal to do that under the Investment Company Act of 1940.

But, and I think you know what's coming by now, that doesn't apply in Puerto Rico.

Because apparently, no laws apply to businessmen down there.

I would not be surprised if in Puerto Rico, hedge fund managers somehow have the ability to fly due to some bullshit exemption to the law of gravity, Strom Thurmond wrote up in the f-ing 1980s.

Look, the point is, 3.5 million Americans are facing a dire crisis right now, and The clock is ticking.

Their next debt payment is due on May 1st.

And in the short term, they need relief from hedge fund lawsuits and an opportunity to try to restructure their debt.

And in the long term, we need to stop treating Puerto Rico like it's just a tax haven, or a place to have terrifying sex with a stranger in a coconut mask.

And instead, we have to start treating it like an island of American citizens whose fate is interwoven with ours.

And look, there are certainly better voices than mine to speak on behalf of Puerto Rico.

Luckily, there is someone with Puerto Rican parents and an amazing voice, and he is here tonight.

Please welcome the great Lin-Manuel Miranda!

My family's from Puerto Rico, the tropical destination where you can spend your Washington's, the spot where you vacation.

A commonwealth with not a lot of wealth, a not quite nation, 70 billion dollar topic of conversation.

Hoping to God John Oliver's comical dissertation resonates with the Congress that got us in this situation.

Along with suicidal tax incentive declarations.

A hurricane is coming, and we're running up a loss.

We got here through a million misguided loopholes that giveth and take away businesses and poop in our soup bowls.

They crapped in yours, they crapped in mine.

And somewhere down the line, Strom Thurman's ghost busted a cap and a chance at chapter 9.

The great debate over statehood has to wait.

That's Rose and Jack on the Titanic asking, when's our next date?

Then we'll figure out our Facebook relationship status.

We have to help our island just 100 miles across.

To recap, 3.5 million American civilians are on the hook for billions.

Vulture funds are circling and lobbying for payout.

There's no structure for what happens if you let this crisis play out when May is less than a day out.

The hard part is in convincing Congress Puerto Rico matters so their heart is in the fight for relief.

A belief that you can pass legislation to ease our grief.

Paul Ryan, I'll come sing Hamilton at your house.

Made my world arriver, ladies and gentlemen.

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Puerto Rico: Last Week Tonight with John Oliver (HBO)