A Bit Of Insight Into Puerto Rico's $72 Billion Debt Problem -- The New York Times -- February 7, 2016

When stories like this come out, it's going to be hard for US senators to approve a bailout for Puerto Rico. The New York Times is reporting:

And that is the catch. What most likely would be the biggest recurring expense for these attractions — electricity — costs Aguadilla nothing. It has been provided free for years by the power authority, known as Prepa.

In fact, the power authority has been giving free power to all 78 of Puerto Rico’s municipalities, to many of its government-owned enterprises, even to some for-profit businesses — although not to its citizens. It has done so for decades, even as it has sunk deeper and deeper in debt, borrowing billions just to stay afloat.

Now, however, the island’s government is running out of cash, facing a total debt of $72 billion and already defaulting on some bonds — and an effort is underway to limit the free electricity, which is estimated to cost the power authority hundreds of millions of dollars.

But like many financial arrangements on the island, the free electricity is so tightly woven into the fabric of society that unwinding it would have vast ramifications and, some say, only worsen the plight of the people who live here.

And who thought this up?

The free power dates from 1941, when the utility was established by Rexford Tugwell, a member of Franklin D. Roosevelt’s brain trust and the last American governor of Puerto Rico to be appointed by the president of the United States.

He contended that for electricity to benefit the people, it had to be owned by the people, and he created Prepa by nationalizing the handful of private electric companies then on the island.

Coincidentally I'm reading a biography of Ayn Rand. She would have predicted this when she wrote The Fountainhead back in 1942. She knew Roosevelt was a disaster waiting to happen.