Limited liability, along with joint stock ownership, was possibly the greatest financial invention of all time. In terms of big history, I would mark the inception of this form of human social organization as the beginning of "The Great Acceleration." To a great degree, this is also why the West became so dominant until recent times, allowing for the building of then state of the art ships to undergo risky trade and exploration missions. Without it, no one besides monarchs would invest for fear of being financially ruined for the rest of their lives.

Conflating personal morality with economics... is very bad. It leads to things like debtor's prisons (which, unfortunately, exists more or less in America) and heavily prejudices against poorer people. It's an easy to understand system... you borrow money, you pay it back with interest. Its the lender's responsibility to ascertain your credit worthiness. If you default, it becomes harder for you to get credit and you pay higher interest. There is no need to also attach negative behavioral characteristics. Lets face it, we all know someone who is bad with money, but that doesnt make them a bad person, it just means they need an accountant.

How many times has the President declared bankruptcy? I have many issues with Trump but this is not one of them. in fact, I commend him for being able to reinvent himself by learning how to create an effective brand and sell his name.

You wouldn't bat an eye if a company made a controversial decision, like laying off a number of workers for the benefit of shareholders. Yet too often, we judge people if they cannot pay back.

They should just default. Youll have a higher interest rate for future loans, but youll have something to invest for growth and not stifled by austerity. Ask Greece how austerity is going for their economy.