Bankruptcy: The Reset Button for the American Dream

The Fourth of July weekend was slow enough to allow my reflection on how to tie in our nation’s anniversary with this bankruptcy blog.

The first thing I wondered: if the US walked into my Wausau office (figuratively, of course) seeking bankruptcy advice, what would its debt history look like? I found a website called Treasury Direct that tracks such data and a quick review of the figures confirm the whisperings I heard that our nation has always carried debt.

The healthiest our nation’s outstanding debt was during the Andrew Jackson presidency, when he made true on his threat: “The Bank is trying to kill me but I will kill it.” President Jackson even explained why he killed it, convinced that he had done his duty to the American people in protecting the bank from foreign investors by closing it down.

According to Treasury Direct, our lowest outstanding budget was in 1835, when it fell to a whopping $33,733.05 as a consequence of President Jackson’s bankicide. A recession soon followed, complicating his already controversial legacy, and our nation’s outstanding debt has ballooned many times over since.

I’ll skip a discourse on how the budget grew and the history behind the existing Bankruptcy Code and instead retell how the Supreme Court defines the role of bankruptcy:

“It gives to the honest but unfortunate debtor…a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.” — Local Loan Co. v. Hunt, 292 U.S. 234, 244 (1934).

Bankruptcy offers a way to rebound from past mistakes, and provides a limited safety net for those who seek to the growing risk of private enterprise.

Bankruptcy is about forgiveness. This last Fourth of July incorporates an element of forgiveness for some of us. I choose to love our country despite all its past mistakes and current earmarks of corruption.

Bankruptcy can be a reset the button that restarts our American Dream, whatever that may entail.

One irony in my contemplation was that our nation doesn’t have the same power that individuals do under the Bankruptcy Code to get a fresh start, short of inviting another Andrew Jackson into the government to shut the whole thing down.

The second irony is the contingent in Washington that looks down upon the Bankruptcy Code and implies that debtors who seek its relief are somehow dishonest or immoral for seeking a fresh start. “Shame on you for discharging debt,” say the people creating it for our country at breakneck speeds.

God bless America – and the hypocrites who run it.

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