By Cathy Kunkel, Jacobin

A federal judge in New York will soon be ruling on the largest local government bankruptcy in US history — not of any city in New York, but of the Commonwealth of Puerto Rico.

The judge will decide whether to approve a debt restructuring deal that will have major consequences for Puerto Rico’s people and economy over the next several decades. It is a deal reached by holders of Puerto Rican debt and the Financial Oversight and Management Board, a congressionally created fiscal control board with the power to negotiate on behalf of Puerto Rico’s government.

The deal restructures more than $30 billion of the $73 billion in outstanding debt that the island had incurred as of 2015, when a former governor officially declared the island unable to pay its debts. (Some of the original debt has already been restructured, and other chunks, including the debt of the Puerto Rico Electric Power Authority, are currently being negotiated). “Restructuring” here means that the old debt will be retired, and a smaller amount of new debt will be issued to replace it, to be paid back over the next thirty years.