There's a difference in perception between personal, corporate, and government bankruptcy. Personal bankruptcy is seen as a black mark of either poor personal discipline or a string of bad luck. Corporate bankruptcy is largely ignored, held up in rare cases as a source of embarrassment (but little else), or more often in startup-land, a signal of "experience". Government bankruptcy is something else entirely, and generally unforgivable without significant outside catastrophes. You can blame the politicians, but in a Democratically-elected government, these are your representatives.
Interesting to note on the corporate angle, bankruptcy laws are a fairly-recent invention. (Where by "fairly recent" I mean "several centuries".) The US's laws, in particular, are credited with fostering some of the innovation in this country, as they reduce the impacts of failure.
You make a really good point. HN seems to venerate startups that fail, which isn't very different from defaulting on a loan (and in many cases these startups are defaulting on loans as they shut down).
Yet, in any thread where Greece, Puerto Rico, etc come up there's this strong backlash against defaulting as being somehow immoral (as though it's not written into the lending agreements). What exactly is the difference between burning a bunch of VC money then shutting down and defaulting on a loan? In both cases we have an institution putting money at risk in the hopes of making a profit, and then losing it. I don't see the big moral difference here.
>> HN seems to venerate startups that fail, which isn't very different from defaulting on a loan (and in many cases these startups are defaulting on loans as they shut down).
I don't subscribe to the notion that "bankruptcy is immoral", it's just a business transaction within the established framework with checks and balances in place.
That said though - situation with startups and business development loans in general is a little different because startups are by definition attempting to turn the idea they present to investors into reality with investors' money. So unless they fail because of a blatant mismanagement of funds (which does happen of course) - in a typical startup failure situation where something is built but there's no more runway and no more money coming in and no buyers to take over the operation - this just feels like it's easier to justify the less negative vibe around that situation.
The answer, as I see it, is big dollars and moral focus. A VC investing a couple million bucks in a long-shot startup? You expect risk. Ditto, say, a $300k mortgage to a family of four, but that's more portfolio statistics.
Multi-billion dollar governments go bankrupt because of mis-management. Less "Uber For Dogs" and more "Enron", minus the intentional criminality. Governments go bankrupt because its citizen "shareholders" vote for continued debt accrual and negative EBITA. But citizens don't care. It's OPM: Other People's Money. Since they're also "customers", their goal is to get as much possible out.
Eh, that's cheap. A citizen has far less control over their government than a corporation's managers over their treasury or an individual over their own finances. So your argument applies far less to a government than in the other cases. In any case, politicians actions do not equal the will of the people, as anyone acquainted with a Republican form of government should know.
Majorly cheap, but you're also highlighting a massive bystander effect. "What hope do I, one citizen, have of changing anything?"
The other point is (arguably) that government should not be risking bankruptcy for the sake of innovation. Which in the cases of government bankruptcy, was not the reason for insolvency anyway. So then it comes back to mismanagement, where maybe the better analog is personal bankruptcy. If an individual came to you and said they were declaring bankruptcy because they had spent more than they made for the last 20 years, you probably wouldn't have much sympathy.
At the end of the day, they're all just humans making bad decisions
But it seems like it would honestly be the opposite (i.e., government bankruptcy being bad). The more people that are involved, the higher chance there is of a tragedy of the commons
Interesting to note on the corporate angle, bankruptcy laws are a fairly-recent invention. (Where by "fairly recent" I mean "several centuries".) The US's laws, in particular, are credited with fostering some of the innovation in this country, as they reduce the impacts of failure.