IF REPUBLICANS ACTUALLY BELIEVED THIS WE'D RESTORE STUDENT DEBT BANKRUPTCY:

Because bankruptcy is associated with something that we are deeply uncomfortable talking about -- business failure and personal financial distress -- our bankruptcy procedures remain among the great unsung achievements of American life. We have retained the Victorian terror of bankruptcy, both the thought and the word itself -- recall Donald Trump's avoidance of the word "bankruptcy" when talking about being forced to take one of his struggling businesses and "throw it into a chapter," his favorite evasive euphemism for bankruptcy. But bankruptcy in our time is not a disaster on par with dying in a cholera epidemic. Though it may be embarrassing and painful, our bankruptcy process performs the invaluable service of codifying the terms of failure. And failure is essential to the success of a free and dynamic economy -- a world without it is a world without innovation and growth.

Failure is one of the main ways we adapt our economic arrangements to new conditions. Sometimes, those new conditions emerge slowly, as with the death by inches of many American newspaper publishers; sometimes, those conditions change almost overnight, as with the coronavirus.

It is famously the case that most new businesses fail. And that is especially true of small businesses, though it is good to keep in mind that many of today's corporate behemoths (Microsoft, Facebook, Apple) were once small businesses, too. Among new small businesses, one in five fail in their first year, and half fail by their fifth year. One wonders why entrepreneurs bother with the risks and demands of starting something new when many of them, being capable and energetic, might find comfortable salaried employment at a well-established firm. The answer has to do with risk and reward. Successful entrepreneurship is generally much more lucrative than is a successful career managing someone else's business: There are not very many billionaires who made their money on salary, but even at the less rarefied levels of business life, an entrepreneur who starts a successful dry cleaner or a prospering coffee shop will generally earn much more than someone who manages a dry cleaner or a coffee shop started by someone else. The upside is great -- and, equally important, the downside is not as grim as it could be.

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