The economist says that the government just wants to spend the money elsewhere;Carlos Colón de Armas, an economist and MBA finance professor at the University of Puerto Rico, explains that contrary to what [Puerto Rican Governor] Padilla has said, “the public debt is easily payable.”The best evidence of this, the economist says, is the payment the Puerto Rico Electric Power Authority made on Wednesday to its creditors: “the government made the payment that was due without any problem.”
According to señor Armas, to meet its obligations to bondholders the government would have to divert only 17% of its revenue to that end. So, if they don't, it's because they prefer to use that money for something else. The political problem is that a large part of the debt is held by Puerto Ricans of rather humble status. People who were counting on those bonds to fund their retirement.“The problem is that reducing spending generates political problems,” Colón de Armas explains, “which the government does not want to incur. So they are making the mistake of seeking financial relief for the debt, when they should be looking at their expenses.”
And the Puerto Rican Constitution places those bondholders ahead of Puerto Rican public employees.