I'm barely halfway through this incredible piece on the history of debt at TripleCanopy, but let me recommend it to you as nice blend of next-level Web journalism and timely perspective on why we think about debt the way we do:
In the throes of the recent economic crisis, with the very defining institutions of capitalism crumbling, surveys showed that an overwhelming majority of Americans felt that the country’s banks should not be rescued—whatever the economic consequences—but that ordinary citizens stuck with bad mortgages should be bailed out. This is quite extraordinary, as Americans have, since colonial days, been the population least sympathetic to debtors. (Back then, the ears of an insolvent debtor would often be nailed to a post.) The notion of morality as a matter of paying one’s debts runs deeper in the United States than in almost any other country, which is odd, since America was settled largely by absconding debtors. Despite the fact that the Constitution specifically charged the new government with creating a bankruptcy law in 1787, all attempts to do so were rejected on “moral grounds” until 1898, by which time almost all other Western states had adopted one. The change was epochal.
Check out the whole thing.
-- Tim Fernholz
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