It was Margaret Thatcher who pointed out that in the end socialism always fails: you run out of other peoples’ money. And the thing is she wasn’t talking about full on Soviet socialism, or the Chavism that has brought Venezuela so low. No, rather, she was talking about the slower socialism of politicians going mad and throwing the taxpayers’ money around like they were sailors on shore leave. And that is, roughly speaking and in an inaccurate nutshell, what has happened to Puerto Rico. The place has simply spent more than can possibly be raised out of the population in taxation and is therefore bust. One reason there being that Puerto Ricans can move to the mainland but their share of that debt doesn’t follow them.

The solution to this is very simple to state: someone, somewhere, is thus going to lose money. The fight is, as it always is, over who that is going to be, whose money has been flushed around that u-bend? And the problem in that fight is that for various complicated reasons we need not go into here the island(s) cannot go bankrupt and thus get a court to decide who it is that doesn’t get their money. Which is all a bit of a problem. And this is where Bernie Sanders is actually correct: no, not in his socialism, democratic or not, nor in his desire that government pay for ever more things through the power to confiscate money via taxation. Rather, in what the solution should be when the inevitable happens and you run out of other peoples’ money. Quite simply, don’t pay back the people who lent you money.

Sadly, that’s not what Congress has decided to do. What they are doing is in this bill. And Promesa does indeed install a colonial-like financial oversight board that essentially gets to run the affairs of the island for the next 5 or possibly 10 years. Various on the right quite like this, Grover Norquist among them:

Congress needs to step in now; otherwise, a huge taxpayer bailout is the likely outcome. PROMESA is the best, most fiscally responsible way to prevent a bailout from occurring. A fiscal-control board, similar to those that helped reverse the fiscal misfortunes of New York City and Washington, D.C., will be created under the legislation. The board’s responsibilities will include determining the depth of the fiscal situation, approving budgets, and producing financial statements. In short, it will ensure that the Puerto Rico fiscal crisis is addressed without spending a dime of taxpayer money.

I am less than convinced by that. I am a great deal more convinced by this from Bernie:

“When you establish a federal control board that says these unelected officials have the power to make major, major decisions impacting millions of people and they are accountable to nobody … that’s wrong,” Sanders insisted, “to deafening applause,” AP noted.

Puerto Rico faces a decade-long economic crisis, with a $72 billion debt that the governor says is unpayable and must be restructured. Hedge funds own much of the country’s debt.

Sanders slammed the “vulture capitalists” that are trying to impose crippling austerity measures on Puerto Rico that will hurt poor and working-class families in an attempt to suck up the money. He says the hedge funds can take a “massive haircut.”