It’s all over the wires: Puerto Rico has defaulted on its $58 million payment to creditors of its Public Finance Corporation, which was due by the end of day. San Juan’s treasury only managed to scrape together some $628,000 towards the total. The government had tried to argue that the PFC bonds were of a different category—and had a different legal status—than general obligation debt. Credit rating agencies rejected the argument. “Moody’s views this event as a default”, Moody’s analyst Emily Raimes said in a statement, according to Reuters. “This is a first in what we believe will be broad defaults on commonwealth debt.”
What now? A whole lot of mess, more than likely. WRM wrote at length on Friday about what needs to happen next, in case you missed it. The kicker from his piece:
The United States faces some serious issues as the 2016 election cycle begins; the blue model meltdown is bigger and in its way more toxic than anything that happened at Chernobyl. Reporters and voters should be asking candidates what they plan to do about it.
The Republican debates start this week. We hope the fourth estate will be rising to the occasion.