The Incredible Cost of Going Broke

Puerto Rico’s road to financial freedom is cripplingly expensive. Already, as Bloomberg News reported Monday, the island has spent as much as $154 million to financial consultants and lawyers as it grapples with its unpayable $74 billion of debt. And that was incurred mostly before it filed for a bankruptcy-like restructuring in May.

And that bill is going to rise substantially. It’s easy to see Puerto Rico incurring more than $400 million in additional fees as it works through a complicated web of debt. This is a shame from many perspectives; that money could easily pay for the annual pensions of tens of thousands of Puerto Rico retirees, not to mention schools, hospitals, roads and police officers. Creditors wouldn't mind seeing a little more in their pockets. But this is not a screed against greedy lawyers and consultants. This dispute clearly won't solve itself, as parties have failed to reach an agreement out of court. And outside professionals won't work through the labyrinthine issues involved unless they're paid. The question now is the price tag.