Who Will Bail Out America?

Washington, D.C. – This morning, Congressman Mo Brooks (AL-05) continued his series of House floor speeches highlighting “bad example” countries who are reaping the consequences of financially irresponsible leadership, and again called on America to balance the budget before it is too late.  America must learn from nations like Greece and Venezuela . . . and from Puerto Rico, a territory that has had its credit rating cut to "junk bond status” and is defaulting on its $70 billion debt.  As Puerto Rico desperately seeks a bailout, today Brooks asked: “Who will bail out America when America defaults on its debt?”

Brooks stated, “Puerto Rico, like America, suffers from a bloated central government, welfare programs that undermine the work ethic, decades of financial mismanagement by elected leaders, and a resulting anemic economy and shrinking job market that causes roughly 7,000 citizens to flee Puerto Rico each month.”  Brooks continued, “Puerto Rico’s debt defaults and resulting economic morass have forced Puerto Rico to delay tax refunds, fire public-sector workers, raise sales taxes to a record 11.5%, and close over 100 schools.  Unfortunately, these austerity measures, and more, are inadequate because Puerto Rico’s self-serving and financially irresponsible elected officials waited too long.  Puerto Rico still cannot pay its bills or creditors.”

Brooks concluded, “If voters do not elect financially responsible officials to Washington, America will endure the same debilitating bankruptcy and insolvency that wreaks havoc in Greece and Puerto Rico . . . with one major difference . . . unlike Greece, which has been bailed out three times by the European community, and unlike Puerto Rico, which may yet be bailed out by American taxpayers . . . there is no one who can, or will, bail out America!”

Mo Brooks Floor Speech: Puerto Rico & Who Will Bail Out America?

April 20, 2016

U.S. House Floor

Mr. Speaker, America has blown through the $19 TRILLION debt mark and rapidly approaches the $20 TRILLION debt mark.

The nonpartisan Congressional Budget Office warns Washington that America faces an unending string of trillion dollar a year deficits beginning a mere six years from now and that America’s debt will blow through the $29 TRILLION debt mark in a decade.[1] 

Further, as debt principal and interest rates surge, America’s debt service costs will increase by $600 billion a year within a decade.[2]  For perspective, $600 billion is more than America spends on national defense![3]  Which begs the question: where will that $600 billion in additional debt service cost come from?

America must learn from financially reckless nations like Greece and Venezuela . . . and from Puerto Rico, an American territory that has had its credit rating cut to "junk bond status"[4] and is defaulting on its $70 billion debt.  For emphasis, Puerto Rico owes roughly 40% of all Puerto Rican tax collections,[5] $4.1 billion, in debt payments this year.  That’s tax revenues not building roads, not educating children, and not growing the economy.

Puerto Rico, like America, suffers from a bloated central government, welfare programs that undermine the work ethic, decades of financial mismanagement by elected leaders, and a resulting anemic economy and shrinking job market[6] that causes roughly 7,000 citizens to flee Puerto Rico each month.[7] 

Only 40% of Puerto Ricans are employed or looking for work.[8]  Why bother to get a job when American taxpayers pay Puerto Ricans to not work by doling out free food, free health care, and other welfare worth $1,743 per month – almost $600 more than minimum wage take-home earnings?[9]

Puerto Rico’s debt defaults and resulting economic morass have forced Puerto Rico to delay tax refunds,[10] fire public-sector workers,[11] raise sales taxes to a record 11.5%,[12] and close over 100 schools.[13]  Unfortunately, these austerity measures, and more, are inadequate because Puerto Rico’s self-serving and financially irresponsible elected officials waited too long.  Puerto Rico still cannot pay its bills or creditors.[14] 

Puerto Rico Governor Alejandro Padilla recently stated that, if Congress does not intervene, [quote] “a humanitarian crisis will envelop the 3.5 [million] American citizens on the Island” [end quote].[15]  Puerto Rico asks Congress to let Puerto Rico default on its legal obligations via bankruptcy or force American taxpayers to bail out Puerto Rico’s decades of financial mismanagement . . . never mind that, according to a 2010 Government Accountability Office report, mainland American taxpayers already subsidize Puerto Rico to the tune of $16 Billion per year, or roughly $4,500 per Puerto Rican.[16]

As Puerto Rico desperately seeks an American taxpayer bailout, Americans should ask, “Who will bail out America when America defaults on its debt?”

Mr. Speaker, America must learn from Puerto Rico, a territory that is spiraling into bankruptcy and insolvency because of a $20,000 per capita debt burden . . . a debt burden, I might add, that is three times better than America’s $60,000 per capita debt burden![17]

If America’s creditors stop loaning America money – if America is forced to go “cold turkey” on its debt addiction - America could be forced to slash military pay or eliminate the volunteer army altogether and go back to a draft, cut Social Security and Medicare benefits, and the like. 

Mr. Speaker, America’s spending binge and accompanying debt and deficits are unsustainable.  If voters do not elect financially responsible officials to Washington, America will endure the same debilitating insolvency and bankruptcy that wreaks havoc in Greece and Puerto Rico . . . with one major difference . . . unlike Greece, which has been bailed out three times by the European community, and unlike Puerto Rico, which may yet be bailed out by American taxpayers . . . there is no one who can, or will, bail out America!

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