Intellectually Bankrupt: Slate dissects the myth that all people filing for bankruptcy are overspending consumers.
So, the recently enacted bankruptcy reform may seem like a classic case of ensnaring dolphins in an effort to catch tuna. America's economic system is exceptional in part because it encourages, pardons, and excuses failure. Nobody starts a business intending to go bankrupt, but it happens. And when it does, the nation's bankruptcy system—and its general tolerance of failure—has enabled people to pick up, move on, and try again with relative ease. In today's economy, which affords people unprecedented opportunities to start their own businesses, credit cards are frequently the preferred method of financing. So, while the new bankruptcy law might deter some people from overborrowing, it might also deter some people from leaving their dreary jobs and opening a store, or selling on eBay, or importing T-shirts. At the margins, lots of mundane businesses, and perhaps even a few great ones, may never get off the ground.