More on the Bankruptcy Bill

Another inevitable consequence of the bankruptcy bill, as noted by Seeing the Forest’s Dave Johnson, is that it will deter entrepreneurship. Starting a new small business generally necessitates incurring a significant amount of personal financial risk, and this new legislation makes such risk even riskier.

Tangentially, entrepreneurship is one of the reasons I have always supported socialized healthcare. In a country like Britain, for example, you don’t have to worry about health insurance. Starting your own company doesn’t mean losing insurance from an employer, nor designating some of the start-up costs for employee coverage. Imagine being able to start your own business without worrying about medical coverage. The rising costs of healthcare and health insurance in America, however, is making it increasingly difficult to start one’s own business. Coupled with making financial risk even more unappealing, owning a business becomes a much tougher proposition in America than elsewhere.

Because new small businesses generate new jobs, disincentivizing starting such businesses are unwise, as it could also have a grave effect on job growth. Poor job growth, higher unemployment, fewer people covered under employer-sponsored healthcare plans and hence dependent on social programs or burdened with high medical bills, more possible bankruptcies… It’s an economic nightmare waiting to happen.