14 February 2012

Plunging Us Deeper Into The Toilet

Back in November, 2011, it was widely announced that Our (non)government had basically maxed out the amount of money it could borrow to fund its pillaging campaign. The (non)administration made tiny puling noises that amounted to feeble "Uh-uhs," unable to hide the devastating increase in Our public debt to within a few percentage points of Our Gross Domestic Product (GDP). What that means, statehooders, is that We owe almost as much money as Our production capacity; when it happens to you as an individual, your income is equal to or less than your total debt and the next step is bankruptcy.

Now, the local Aqueduct and Sewer Authority (ASA), the informal nickname of the statehood party in some wittier circles, is poised to issue $1.25 billion in tax-exempt bonds, the largest such offering scheduled in 2012. The ASA is also issuing another $350 million in taxable debt to Us, the rape victims. Isn't that special?

But wait, there's more. The ASA has the lowest possible investment rating issued by Standard & Poors. The only thing worse is junk bond status, a level The Larva wishes his political capital could reach if somehow he could multiply what he has by 8,529.

What does this mean? It means that for investors to put cash into these bonds, they need to offer a high interest rate; in this case, 5%. With Our GDP dropping--statehooders, that means We're "making" less money--guess who's going to pay that 5% interest rate to the lucky vultures who buy Our sewage bonds?


And as Bloomberg points out, We're really good at it: "Puerto Rico debt has returned 3.61 percent this year, the most of any U.S. state or territory and more than the total market, general obligations and revenue bonds, according to Barclays Capital Indexes..."

Yes, We're paying Our debts, but is it with higher productivity, i.e., more jobs, more companies, more businesses, more exports? HAHAHAHAHAAAhahahahaafuckno: We're doing it with taxes. IVU Loto, anyone? (The sales tax has yet to make even the slightest dent in any program it was supposed to support.)

Instead of Our progress, here's what's happening: the current hyena horde that pretends to be a government is issuing billions upon billions of dollars in debt, getting money from investors with promises of interest rates that come from Our pockets. But is the money being used to improve roads, fund sensible projects , fix Our infrastructure or somehow make Us more competitive?


Even Bloomberg tactfully touches on that failing. "(Standard & Poors) rates the bonds BBB-, one level above so-called junk status, citing the authority’s unwillingness to raise rates and its deferred capital needs..."

In other words, the (non)administration doesn't charge what the water service is worth (raising rates means losing votes) and "deferred capital needs" means that what's been needing to be done for decades to fix the water system has been set aside to line other pockets. Hence a BBB- rating.

Now Let's be fair: that problem goes back to the late 1960s, so every pestiferous administration since 1968 is pretty much to blame.

But wait, there's more: THIS little fillip is clear evidence of the merry-go-round hustle that highlights how this (non)administration is cleaning Us out with no thought beyond November 2012: "Proceeds of the sale will be used primarily to refinance lines of credit extended by the Government Development Bank, according to a preliminary official statement. The authority may also fund the capital-improvement needs for the next fiscal year..."

"Refinance lines of credit." You and I would call that "Using one credit card to pay off another." Savvy financial management? Hell no. A hustle? You bet.

Then this: "The authority may also fund the capital-improvement needs for the next fiscal year..."


The next fiscal year, 2012-2013, will only be "theirs" if The Larva wins. When he loses, the ASA agency heads and other political shafters in on this deal know they'll be gone, so """promising""" to "fund capital-improvement needs" in some never-happening future is like borrowing money when you kwow you're going to declare bankruptcy and move to Barbados.

Which is exactly what's happening here, as the hyena horde impels Us to greater profundity into a personal-use sewage access system.

We should have flushed them out long ago.

The Jenius Has Spoken.

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