Having already defaulted multiple times over the past several months, the Puerto Rico faces more debt per capita than any U.S. state, according to a commentary on Realclearpolitics.com. While the average debt to GDP ratio of the fifty states is 7.2 percent, Puerto Rico’s is approximately 70 percent as the territory grapples with a 45 percent poverty rate and an economy that has shrunk by 10 percent over the past decade. Some have fomented a simplistic narrative that pits Puerto Rico’s government versus “greedy” hedge funds. But this neglects not only the direct impact on the 9 million Americans who have a portion of their retirement savings invested in the island’s bonds, but also the detrimental impact on Puerto Rico’s economic future — and broader consequences for borrowing costs across the country, according to the commentary.
