Puerto Rico is broke. They owe $70 billion on loans taken out in the past. Between pensions, welfare, lotta featherbedding, and plain old graft, the Puerto Rico government spends far more than it collects in taxes. They cannot make payments on the loans coming due.
Thru some quirk in the law, Puerto Rico as a US territory, cannot declare bankruptcy the way cities and towns, and possibly states can. The idea in bankruptcy is to prevent everyone and his cousin suing, which is more than anyone can defend against, and have an "impartial" judge divvy up the bankrupt's assets. For companies, the judge usually decides to keep the company going, and avoid laying off all the employees. To this end, the bankruptcy judges usually tells the lenders to just suck it up, cancels the debts, makes some company reforms and sets the company going again.
For places like Detroit and Puerto Rico, the path is less clear. No bank with two brain cells firing is going to loan a nickel to places like that. The unions, the pensioners, and everyone else will die in the trenches before allowing any cost cutting. Which leaves the cash strapped government to make payroll with IOU's.
Mean while, all the big New York banks, who made all the totally foolish loans are down in DC right now lobbying Congress to bail out Puerto Rico, i.e. have taxpayers pay off the loans, so the banks don't have to to confess how stupid they are. The banks are asking for $70 billion in comfort money. That's a lotta money.
There is some kinda Puerto Rico deal going thru Congress right now. Speaker Ryan is pushing it. Nobody knows what's in it.
A Puerto Rico deal should merely make it possible for Puerto Rice to declare bankruptcy and be protected from a zillion lawsuits while they work out the details. The bankruptcy court should have the power to cancel debts, cancel contracts, fire politicians, and raise taxes. It should NOT pay off the lenders. The lenders made stupid loans, anyone could tell Puerto Rico could not pay off the loans, even twenty years ago. For being stuck on stupid, the banks oughta take a $70 billion hit. Maybe it will learn 'em some.
And our noble MSM ought to find out what is going down in DC and clue us in. Perhaps the banks have bought them off?