no american taxpayer bailout of puerto rico...,

utopiathecollapse |  Puerto Rico’s debt crisis moved into a more perilous phase for residents, lawmakers and bondholders Monday after the Government Development Bank failed to repay almost $400 million. The missed principal payment, the largest so far by the island, is widely viewed on Wall Street as foreshadowing additional defaults this summer, when more than $2 billion in bills are due.

Together with the spread of the Zika virus, the risk of cascading defaults is putting new urgency on bipartisan negotiations in Washington over legislation granting the U.S. territory new powers to restructure more than $70 billion in debt. The Centers for Disease Control and Prevention reported last week the first U.S. death related to the mosquito-borne Zika virus—a Puerto Rican man in his 70s who died in late February.

In a letter to Congress, Treasury Secretary Jacob Lew warned on Monday that a U.S. “taxpayer-funded bailout may become the only legislative course available” if the proposed restructuring legislation isn’t approved. The island’s debt is held by mutual funds, hedge funds, bond insurers and individual investors, who were attracted in part by tax benefits and high yields. The default Monday casts serious doubt on the commonwealth’s ability to make other future payments, which “means that other defaults are very likely on other Puerto Rico credits,” said Paul Mansour, head of the municipal credit research group at investment management firm Conning.

Monday’s developments are the latest sign that a long-running economic crisis has reached an acute stage, embroiling financial markets and Congress. Benchmark Puerto Rican bond prices fell to near record lows Monday, with some investors paying less than 65 cents on the dollar for general obligation bonds maturing in 2035, an unusually low price.