IN RECENT years it has usually been the House of Representatives which has waited until the last moment to avert an economic catastrophe, a government shutdown or a default. This week it was the Senate’s turn. On June 29th the upper house passed a bill, already approved by the House and backed by the president, allowing Puerto Rico to restructure its debts, two days before the Caribbean territory was set to default on a $2 billion payment.
Default was the only option left for the island. The government does not have the money to pay the bill, according to Puerto Rico’s governor, Alejandro GarcÃa Padilla. Nobody sane would lend it to them. But default was not itself the main worry; few will shed tears for the territory’s creditors. The real problem is that investors in Puerto Rican debt have filed lawsuits arguing that the island must pay them before buying things like fuel for police cars and medicine for hospitals. A concurring judge could kill-off the island’s public services, which the debt crisis has already wounded badly. For example, the neonatal unit in the island’s largest hospital, which Jack Lew, the Treasury secretary, visited in May,...Continue reading
Source: United States http://ift.tt/297kHF9
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