Less than a day after he disparaged Puerto Ricans for “throwing our budget a little out of whack,” President Trump made a peculiar proclamation. Speaking to Fox News host Geraldo Rivera on the ground in Puerto Rico, Trump suggested he would forgive Puerto Rico’s roughly $70 billion debt.
“We’re going to have to look at their whole debt structure,” Trump earnestly told Rivera. “They owe a lot of money to your friends on Wall Street and we’re going to have to wipe that out. You can say goodbye to that.”
Sorry bondholders, whoever you may be (because Trump has no idea), but Puerto Rico’s debt is finito. Done. Zilch. Or so the president claimed, continuing, “I don’t know if its Goldman Sachs, but whoever it is, you can wave goodbye to that.”
According to CNBC, there are a few hedge funds that own a majority of Puerto Rico’s debt. Among them: Blue Mountain Capital, GoldenTree Asset Management, Franklin Advisers, and OppenheimerFunds—the latter two of which hold a combined $10.3 billion of Puerto Rico’s debt as of July.
It’s somewhat amusing that Trump attempted to create distance between himself and Wall Street by suggesting bondholders were Rivera’s friends, as if he doesn’t know a person or two who wields an enormous amount of power at one of those Big Banks. Strangely enough, though, Rivera didn’t seem to care that Trump just said he would waive billions of dollars in debt.
“My aunt Ellie doesn’t care about that,” Rivera said, cutting him off. “She doesn’t care about that, she wants some help and she wants to hear from you.”
Aunt Ellie might not want to hear that Trump quite casually agreed to forgive the struggling island’s debt, but other people on the island undoubtedly do. Whether or not Trump, who is a man known for making hollow promises, actually follows through on his declaration remains unclear. In July, months before Hurricane Maria barreled through Puerto Rico and destroyed most of its infrastructure, bondholders petitioned Congress to reject the island’s request for statehood until its debt was repaid.
And we all know what happens when special interests, represented by organizations with infinitely deep pockets, oppose any semblance of change in D.C.
Update, 9:06 AM: Never mind.