Commentary
With California Rep. Kevin McCarthy finally ensconced in the Speaker’s Chair in the U.S. House of Representatives, here are four reforms he and his colleagues from both parties can advance to help Californians especially.
1. Allow bankruptcy for college debt. Of course, people should pay their debts. But what if you run up $200,000 in medical bills, $100,000 in credit cards, and $100,000 in college debt? Then you probably should at least consider bankruptcy. Except a law Congress passed in 2005 made it nearly impossible to include college debt in bankruptcy filings.
Personal bankruptcy, although regrettable, sometimes is necessary to get on in life. It also disciplines the banks to make sure they don’t make foolhardy loans. In Europe, it’s much harder to declare bankruptcy, limiting options, especially for young people. In America, from our founding almost 250 years ago, it was thought best to let people who fell on hard times start over—to “light out for the territory” like Huck Finn. It’s part of our enterprising spirit….