Tuesday, July 28, 2015
Hedge funds tell Puerto Rico: lay off teachers and close schools to pay us back
Report commissioned by 34 hedge funds says government had been ‘massively
overspending on education’ despite spending only 79% of US average per pupil
Billionaire hedge fund managers have called on Puerto Rico to lay off teachers
and close schools so that the island can pay them back the billions it owes.
The hedge funds called for Puerto Rico to avoid financial default – and repay its
debts – by collecting more taxes, selling $4bn worth of public buildings and dras-
tically cutting public spending, particularly on education.
The group of 34 hedge funds hired former International Monetary Fund (IMF)
economists to come up with a solution to Puerto Rico’s debt crisis after the is-
land’s governor declared its $72bn debt “unpayable” – paving the way for bank-
The funds are “distressed debt” specialists, also known as vulture funds, and se-
veral have also sought to make money out of crises in Greece and Argentina, the
collapse of Lehman Brothers and the near collapse of Co-op Bank in the UK.
The report, entitled For Puerto Rico, There is a Better Way, said Puerto Rico could
save itself from default if it improves tax collection and drastically cuts back on pu-
blic spending...[CONTINUE READING]