In Puerto Rico, the Chickens - and all Other Sort of Assorted Fowl - are Coming Home to Roost

And this time, Rev. Wright has nothing to do with it.  This is what happens when you have decades of mismanagement trying to put off paying the bill until "some other day."

Puerto Rico's governor has unveiled plans to cut 30,000 public sector jobs and raise taxes to confront a "bankrupt government" in the US territory.

Luis Fortuño said he aimed to slash spending by $2bn (£1.4bn) and that layoffs would start in July.

He also announced plans to jump-start the economy, which has been in recession for three years.

He said failure to act would do massive damage to the economy, which could take a decade to recover.

The proposed job cuts - equivalent to 14% of the public work force - will not include police officers and teachers.

"The government is too big and spends too much," Mr Fortuño said in a half-hour televised address. "Simply, the government has to be minimized."

And, as if the news weren't bad enough already,

The government of Puerto Rico borrowed $2.9 billion through pension bonds in 2008, betting that it could reap annual returns of 8.5 percent investing the money, while paying its bondholders 6.5 percent.

“The risk is minimal,” says Jorge Irizarry, who was chairman of the Employees Retirement System of Puerto Rico from August 2007 through December 2008.

Emphasis added.  Famous last words, anyone?

A political appointee, he departed after his party lost the governorship in November. Before working for Puerto Rico, Irizarry was an executive on the island at PaineWebber Group Inc., now UBS Puerto Rico, from 1986 to 1998.

So far, Puerto Rico’s wager isn’t paying off. The 8.5 percent expected rate of return has instead been a loss of more than $200 million, according to a Dec. 12 presentation by fund administrators to legislators.

“It was an arbitrage transaction, and the market has turned against us,” says Carlos Garcia, former president of Banco Santander Puerto Rico, who replaced Irizarry as chairman of the pension fund in January. “I don’t know if the benefits intended will be realized.”

That giant sucking sound?  The sound of wealth, money, and jobs leaving la isla del encanto for a good long while.

UPDATE - 3:56PM: For the Spanish-speakers out there, if you want to see how P.R.'s finances got to where they are today, check this out.