As the debt started piling up and Puerto Rican leaders started getting desperate, commonwealth officials started making bigger and bigger promises to prospective bondholders, according to a Washington Examiner commentary today. And these same leaders kept recklessly spending money they were never going to have while retirees took out more than $1 billion in loans, leaving the retirement system with personal loans to retirees representing around half of its total assets. Puerto Rico's debt isn't like one credit card bill that refuses to go away: it's spread out over many creditor classes, it was purchased at different times, it was purchased under different agreements, and a lot of competing interests have stakes in it. Debt restructuring shouldn't be arbitrary; it should be rational and reasoned with an understanding that future bondholders are looking, according to the commentary. The PROMESA Oversight Board should consider the island's debt load in total, not piecemeal and arbitrarily, to solve Puerto Rico's immediate problems.
