Puerto Rico might be one of the main sources for the instability as they have announced they will default on their next debt payment due August 1. The little island racked up a whopping $70 billion in debt by offering an overly generous welfare system, which allowed citizens to earn more money by not working than they could make working in minimum wage jobs. As a result, their labor force participation rate dropped below 40%.
As a U.S. territory, Puerto Rico is not allowed to file for bankruptcy protection. With most of their debt owed to U.S. banks, the impact of their default could be felt very soon. (Source: US News)
Author: James Bailey
James Bailey is a blogger, business owner, husband and father of two grown children. In 1982, he surrendered his life to the Lord Jesus Christ. In 2012, he founded Z3news.com to broadcast the message of salvation by reporting end time news before it happens.
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