The government of Puerto Rico has confirmed that it failed to make a $58 million debt payment that was due Saturday, a significant escalation of the debt crisis facing the US island territory. Puerto Rican officials had warned on Friday that they would not make the payment because the island legislature failed to appropriate the funds, but they argued it should not be considered a default. Moody's Investor Service says the missed payment was the first in what it believes will be broad defaults on commonwealth debt. Government Development Bank President Melba Acosta Febo says Puerto Rico made a partial payment of $628,000 interest.
Gov. Alejandro Garcia Padilla said several weeks ago that Puerto Rico cannot pay its $72 billion in accumulated public debt and needs to restructure. He has also called this Puerto Rico's "death spiral," CNN Money reports. All of this makes life hard for people who are struggling amid rising joblessness and a contracting economy. Omar Rodriguez, 26, just moved with his wife from Puerto Rico to Texas to start a new life: "I wouldn't imagine having the same quality of life in Puerto Rico at the moment and that saddens me," he says. "Saying goodbye to my parents ... it was a bit unbearable." (Read more Puerto Rico stories.)