On Puerto Rico: ‘yes’ to bankruptcy, ‘no’ to bailout

Puerto Rico is sinking in $73 billion of debt. Mired in a long-running depression, the U.S. territory has already cut essential services to bare bones. Puerto Rico can't fully pay its bondholders without setting off total economic collapse. One of two things can happen, short of doing nothing and setting off a humanitarian crisis. One is to let Puerto Rico restructure its debt in a federal bankruptcy court. The U.S. Treasury recommends that route.

Puerto Rico is sinking in $73 billion of debt. Mired in a long-running depression, the U.S. territory has already cut essential services to bare bones. Puerto Rico can't fully pay its bondholders without setting off total economic collapse. One of two things can happen, short of doing nothing and setting off a humanitarian crisis. One is to let Puerto Rico restructure its debt in a federal bankruptcy court. The U.S. Treasury recommends that route.…