Puerto Rico files for biggest ever U.S. local government bankruptcy

[tenorly]

Puerto Rico announced a historic restructuring of its public debt on Wednesday, touching off what may be the biggest bankruptcy ever in the $3.8 trillion U.S. municipal bond market.

While it was not immediately clear just how much of Puerto Rico's $70 billion of debt would be included in the bankruptcy filing, the case is sure to dwarf Detroit's insolvency in 2013.

The move comes a day after several major creditors sued Puerto Rico over defaults its bonds.

Bankruptcy may not immediately change the day-to-day lives of Puerto Rico's people, 45% of whom live in poverty, but it may lead to future cuts in pensions and worker benefits, and possibly a reduction in health and education services.

At: http://www.reuters.com/article/us-puertorico-debt-bankruptcy-idUSKBN17Z1UC

[muhamed g]

1. bail

we need a federal bailout.

[tenorly]

2. I agree.

We seem to have no problem bailing out banksters, defense contractors, big agro, automakers, and problematic foreign regimes like Chile under Pinochet (favored nation trading status, generous debt rescheduling), Israel, or post-invasion Iraq (debt restructuring, with steep haircut - 75%, I believe).

A similarly generous debt restructuring for Puerto Rico - a U.S. dependency, after all - is very much in order. Its people and creditors would both benefit.