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Puerto Rico cannot pay back more than $70 billion in debt

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http://www.washingtonpost.com/business/economy/puerto-rico-says-it-cannot-pay-its-debt-setting-off-potential-crisis-in-the-us/2015/06/28/cbae1bc4-1e05-11e5-84d5-eb37ee8eaa61_story.html

The governor of Puerto Rico said in a televised address Monday that the island cannot pay back more than $70 billion in debt, setting up an unprecedented financial crisis that could rock the municipal bond market and lead to higher borrowing costs for governments across the United States.

“This is not about politics,” said Puerto Rico’s governor, Alejandro Garcia Padilla. “It’s about math.”

Garcia Padilla said the country needed to postpone for several years its debt payments.

“The first step is to revive economic growth…We will never get out of this vicious cycle,” said Garcia Padilla. “But we need to do more—much more—to return to riches and to become more competitive and have an expansion in the private market.”

Garcia Padilla proposed creating a committee that would work together to create reforms to the country, but he said “sacrifices should be shared,” adding that he welcomed “creditors who want to…

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