A group of billionaire hedge fund managers are trying to force Puerto Rico to fire teachers and close schools in order to pay back debts owed to Wall Street, reported the Guardian. These hedge fund managers are seeking expanded austerity measures similar to what’s plaguing Greece.
Thirty-four hedge funds hired former International Monetary Fund (IMF) economists to analyze Puerto Rico’s $72 billion debt crisis. The best plan they could come up with is for Puerto Rico to dissolve its education program. These hedge funds specialize in “distressed debt” and are called “vulture funds.” These types of funds make money off of financial crises. Vulture funds also tried to get rich off of Greece’s and Argentina’s economic woes, as well as the Lehman Brothers fall in 2008.
The IMF said Puerto Rico spends too much on education. Puerto Rico spends less on education per student than the United States, $8,400 per student compared to $10,667 spent by the United States. Luis Gallardo, majority municipal legislator for Aguas Buenas, said the IMF’s analysis of the Puerto Rican crisis proposes and sets the stage for “radical austerity.”
“They are proposing teacher layoffs, cuts in higher education and health benefits, as well as increased taxes,” said Gallardo. “These proposals have been a disaster for Latin America and would be so for Puerto Rico. Sure, Puerto Rico could pay its debt, but at what cost? We are literally cutting off our own limbs just to stay afloat.”
These billionaires are trying to make money off of the Puerto Rico debacle. Education cuts would only perpetuate Puerto Rico’s poverty problem. Fifty-six percent of Puerto Rican children live in poverty. Considering the island’s plague of poverty, education is the only chance young Puerto Rican students have.