Greg Ip phrases it more elegantly:
Sovereign Default: It’s Not Personal, Just Business. Government debt restructuring becomes routine as Greece, Puerto Rico show emptiness of ‘moral obligation’ to repay
Less than three years after the governor of Puerto Rico called repayment of its debt a “moral obligation,” the U.S. territory is headed for the fourth-largest government default on record.
Though markets have met the event with a shrug, that shouldn’t diminish the significance of the moment. It underlines how much the stigma about government default has faded. Investors would be wise to build this risk into their calculations when lending to governments from now on, especially since arithmetic suggests more defaults are on the way.
If you think I’m too harsh os my island of origin, allow me to point out that, when you are mentioned in the same category as Greece, you are on the wrong track.
UPDATE
Linked to by the Pirate’s Cove. Thank you!
