The Death (Debt) Spiral Consuming Puerto Rico

What I have never understood about Puerto Rico is just how far the group think surrounding our economic problems could play itself out.

Recently, Judge Francisco A. Besosa of the United States District Court in San Juan struck down the "Recovery Act," the infamous Puerto Rico Bankruptcy Law ("Ley de Quiebra Criolla") that was going to give us the leeway to wiggle ourselves out of our debt crisis. In the aftermath of his decision:

Prices on Puerto Rico general obligation bonds dropped on Monday, the first trading day after the court ruling. Yields on a $3.5 billion bond that the commonwealth issued last March traded as high as 10.23 percent, topping yields on similar Greek bonds — suggesting that Puerto Rico is at greater risk of default.
And yet, and yet, just last weekend there was a couple of articles in El Nuevo Dia that were right on target.  In order to solve our financial problems, we must address the root cause.  All you need to do is look at "Puerto Rico's Economy - At A Glance," provided by the U.S. Bureau of Labor Statistics.  Of the roughly one million employed workers in Puerto Rico, almost 26% work for the government.

So, we know what the problem is and what the horrible tasting medicine is that must be taken.  I just wonder how long our group delusion will deny us the cure? Or will we run out of time, default, and let market forces do the job for us?