5 ms·

Debt slavery? Not even close. In America, there are numerous ways still to discharge your sins of a previously extravagent lifestyle funded on credit card. Y

Debt slavery? Not even close. In America, there are numerous ways still to discharge your sins of a previously extravagent lifestyle funded on credit card. You can declare bankruptcy (the article mentions the high cost of $2000+, but there are free social services that will help reduce that cost). You can refuse payment for many years, eventually settling to pay off 10-20 cents on the dollar for debt. You can choose to work in jobs getting paid in cash, thereby having no records of salary, and pay no taxes, and eventually your debt is discharged. And so on. Personally I would like to see people who declare bankruptcies multiple times to serve some sort of jail terms.

startuprules 17y ago
Oh, btw. Guess who pays the sins of the spenders. That's right. People on this board, who watch as their hard work is eaten up by inflation and taxes. Because banks will get paid no matter what.
- tptacek 17y ago
  Guess who benefits from the generosity of the US bankruptcy system? That's right. People on this board, who survive the demise of startup after startup until they manage to start one that lasts and creates hundreds of jobs. Most startups are on a trajectory towards bankruptcy. That's the point. It's why you can "work very very hard for a couple years and then not work anymore", to paraphrase Graham. Extreme risk.
  - startuprules 17y ago
    "Most startups are on a trajectory towards bankruptcy. That's the point" Spoken like an irresponsible gambler. You could utilize: 1.) Savings - Money saved up, maybe used to purchase things, fund companies 2.) Lean startup method - one should bootstrap until a market/user fit is found, while working full time 3.) Scale up when you have the revenue/demand, not until then. Otherwise, you're just gambling with other people's money. We have enough gambling in this economy as it is. (Goldman Sachs is leveraged 100 to 1)
  - byrneseyeview 17y ago
    How common are debt-financed startups? I was under the impression that they were funded by equity, unless they were starting to show profits or had some assets. In fact, a loan to a startup would behave like equity with a ceiling on appreciation, not like consumer debt. For whatever reason, I can't recall hearing about a single successful startup founder who previously declared bankruptcy. The closest I can think of was Bill Bartmann (http://www.businessweek.com/magazine/content/07_18/b4032066.htm?chan=search http://www.businessweek.com/magazine/content/07_18/b4032066....).
tptacek 17y ago
I would like to see the people who design business models that target the kind of people who file bankruptcies multiple times serve some sort of jail term.
- startuprules 17y ago
  Ok, let's take it to a bigger scale. Airline industries declare bankruptcies and gets bailed out time and time again, to tunes of billions. Homebuilders transfer assets to new entities, then declare bankruptcies, pocketing billions and evades creditors. Banks leverage themselves with trillions of debt, and gets bailed out by the government. Meanwhile, regular people have to pay for the billions and trillions of mistakes, with loss of social benefits, or taxes, or inflation. When does it stop? And you would prosecute the politican who enacts a law to incriminate, and prevent future bankruptcies (by saying NO MORE!)?
herdrick 17y ago
That's not true of all kinds of debt. Student loans, which lots of young med school and MBA grads seem to have in the 100K+ range, cannot be discharged through bankruptcy. This hurts the country and the world. Surely there have been a few med school grads who would have founded great wealth producing startups had they not been compelled to practice medicine to pay off their loans.

startuprules 17y ago

Oh, btw. Guess who pays the sins of the spenders. That's right. People on this board, who watch as their hard work is eaten up by inflation and taxes. Because banks will get paid no matter what.

tptacek 17y ago
Guess who benefits from the generosity of the US bankruptcy system? That's right. People on this board, who survive the demise of startup after startup until they manage to start one that lasts and creates hundreds of jobs. Most startups are on a trajectory towards bankruptcy. That's the point. It's why you can "work very very hard for a couple years and then not work anymore", to paraphrase Graham. Extreme risk.
- startuprules 17y ago
  "Most startups are on a trajectory towards bankruptcy. That's the point" Spoken like an irresponsible gambler. You could utilize: 1.) Savings - Money saved up, maybe used to purchase things, fund companies 2.) Lean startup method - one should bootstrap until a market/user fit is found, while working full time 3.) Scale up when you have the revenue/demand, not until then. Otherwise, you're just gambling with other people's money. We have enough gambling in this economy as it is. (Goldman Sachs is leveraged 100 to 1)
- byrneseyeview 17y ago
  How common are debt-financed startups? I was under the impression that they were funded by equity, unless they were starting to show profits or had some assets. In fact, a loan to a startup would behave like equity with a ceiling on appreciation, not like consumer debt. For whatever reason, I can't recall hearing about a single successful startup founder who previously declared bankruptcy. The closest I can think of was Bill Bartmann (http://www.businessweek.com/magazine/content/07_18/b4032066.htm?chan=search http://www.businessweek.com/magazine/content/07_18/b4032066....).

tptacek 17y ago

I would like to see the people who design business models that target the kind of people who file bankruptcies multiple times serve some sort of jail term.

startuprules 17y ago
Ok, let's take it to a bigger scale. Airline industries declare bankruptcies and gets bailed out time and time again, to tunes of billions. Homebuilders transfer assets to new entities, then declare bankruptcies, pocketing billions and evades creditors. Banks leverage themselves with trillions of debt, and gets bailed out by the government. Meanwhile, regular people have to pay for the billions and trillions of mistakes, with loss of social benefits, or taxes, or inflation. When does it stop? And you would prosecute the politican who enacts a law to incriminate, and prevent future bankruptcies (by saying NO MORE!)?

herdrick 17y ago

That's not true of all kinds of debt. Student loans, which lots of young med school and MBA grads seem to have in the 100K+ range, cannot be discharged through bankruptcy. This hurts the country and the world. Surely there have been a few med school grads who would have founded great wealth producing startups had they not been compelled to practice medicine to pay off their loans.