Puerto Rican Bond Default Raises Likelihood of U.S. Bailout | National Legal and Policy Center

Observers lately have taken to calling Puerto Rico “America’s Greece.”  That might qualify as an insult – to Greece.  And the American public may be enlisted to cover the debts.  On Monday, the island government announced that its Public Finance Corporation was unable to make a full scheduled loan payment over the weekend.  The $628,000 disbursement was a blip on the $58 million due, itself a blip on the composite indebtedness of over $70 billion, all of it rated at or near “junk” levels.  Yet the specter of collapse now has become very real.  Moody’s Vice President Emily Raimes terms the partial payment a “default.”  She says:  “This event is consistent with our belief that Puerto Rico does not have the resources to make all of its forthcoming debt payments.  This is a first in what we believe will be broad default on commonwealth debt.”

What do you think?