Puerto Rico’s governor on Monday called for the commonwealth to be allowed to restructure its debts under U.S. bankruptcy code, while a newly appointed adviser to the U.S. territory said it is “insolvent” and will soon run out of cash.
Governor Alejandro Garcia Padilla, in a televised address, said sacrifice must be shared by bondholders, as he called for Washington to allow a bankruptcy debt restructuring.
I think Gov. Garcia Padilla is right. If a debtor is unable to pay, this is the result of bad judgment or bad luck on the part of both the borrower and the lender. They should share the consequences.
There may come a time when this argument has to be made on behalf of the United States as a whole.
Hat tip for the link to Kenneth Illingsworth of Take Back the Land Rochester.