Puerto Rico Files For Bankruptcy Following Record Breaking Debt Crisis

The $3.8 trillion U.S. municipal bond market has been a contentious topic of the federal government during the recent decades, as lawmakers are failing to avoid constant bankruptcy in several states.

The fiscal policies taken by congress every term seem to bring short-term recession and fluctuate towards an imminent break-down which is only a matter of time.

The speculations around the government reforms have shown investors abstaining from the state markets and directing their flow of income in the foreign markets as a safer destination from profit.

In light of the government shutdown that was threatening the entire nation this week, the members of congress have pulled an emergency act that would give them more time to find consensus on the allocation of resources in the next fiscal year.

Repeated federal failure

Detroit’s insolvency in 2013 is remembered as a shameful occurrence for policymakers as they couldn’t get the state to recover from a downturn.

The magnitude of the bankruptcy was seen as a limit that should be avoided in future terms by the federal government, spreading legislations across the nation to bolster and sustain local markets.

Though, in a contrast to the economic instability that is hitting the global market, Puerto-Rico is a step away from filing an even bigger bankruptcy filing then Detroit, amounting to nearly 70 billion dollars.

The lives of the millions of inhabitants of the southern state will be merely affected as already 45 percent of whom live in poverty, but it may lead to future cuts in pensions and worker benefits, and possibly a reduction in health and education services.

Presidential promise and challenge

The challenge lies in the hands of the new president of the United States of America, who as a real estate mogul has vowed to run the economy better than any of his predecessors has ever managed.