Puerto Rico faces an imminent financial crisis caused by decades of economically harmful policies, prolific government spending, and broken if not corrupt governance.
that spillway to make a pile of rocks. if they make the pile big enough it will shore up the foundation of the spillway and stop the erosion. sandra: amazing work they re doing there. bill: the trump team clarifying the president s remarks on puerto rico s staggering debt. press secretary sarah sanders addressed it again yesterday. there is a process for how to deal with puerto rico s debt. it will have to go through that process to have a lasting recovery and growth. this is a process that was put in place and set up under obama and that has a board of advisors that deals with that debt and it will go through that process as we move forward. bill: we ll see how the process works out in the end. you coming from the money background. sandra: that rocked markets. bill: you pulled it off the graph on your phone and said look at this. sandra: the puerto rican bonds. $74 billion in debt.
trish reggen joins us from new york with answers. why should voters viewers care about today s decision? because it tells us we re in bad shape. i mean, the economy is not in a good spot here at home. globally things are in a really tough spot. this is what janet yellen and company recognized here today when they said we re not going to move. we re not going to move even just a quarter of a point to raise rates. you know, this is a sad they don t want to be on zero. they shouldn t be on zero. we ve been on zero for six plus years. do you know what that means? if you ve got a cd, you re earning nothing. nothing right now. nothing on that. you re being forced into riskier assets, into, you know i said puerto rican bonds. maybe that s a good kind of analogy and example. it s putting every day investors in the entire investing community into riskier products. the fed doesn t like being here. i tell you, they feel like they don t have a choice.
real worry is we ve seen a lot of hedge funds in the united states betting on that the problem in greece would get resolved. they re looking to buy the greek bonds. a lot of them bought the puerto rican bonds holding the debt thinking the issue would get resolved. if it doesn t get resolved the institutions could have some problems next week. already, the i m looking here online and already i see the euro is falling fairly quickly. it s down 1.4% against the u.s. dollar. so dom, a lot of europepeople go to europe for vacation. caller: as a tourist, this is a bargain top to be able to come here and buy everything 20% less it s a steal, it s
people outside the island. much of puerto rico s debt is held by unsuspecting investors. million of americans without even knowing it own puerto rican bonds, and when they look in their bank accounts and in their 401(k)s, they are going to see a number that is lower than it was before. reporter: trying to raise money, tomorrow the government will impose a sales tax higher than any u.s. state, 11.5%, as lawmakers debate a new budget p. the problem is so big and has been going on for so long that they just don t know what to do. reporter: so by the end of the summer juan carlos cabrera will move the the mainland where his wife s found a new job. what was once his home his paradise now lost. gabe gutierrez, nbc news, san juan, puerto rico. right here after a quick break, when we go we take you back to vienna. andrea mitchell speaking to the family of one of the three americans currently being held in iran. that conversation here on msnbc.