How's that for a catchy title?
I was inspired by an interesting post over at Lawfare, where the author notes that the term "assassination" has a specialized meaning in legal circles – namely, it involves an unlawful killing – whereas in the popular imagination the term basically refers to any sort of covert killing, particularly those with national security implications.
"Bankruptcy" is another such term. For lawyers, bankruptcy invokes a legal process to solve overindebteness. In the United States, its a court-supervised process under the Bankruptcy Code.
But in the press and other general contexts, bankruptcy is often used as a synonym for insolvency. Der Spiegel is one of the worst offenders, routinely referring to Greece, the United States, and other sovereigns "going bankrupt."
"Not possible," I say to myself while reading.
But we can expect a lot more of this loose use of the term going forward, especially as we approach the "cliff." After all, we are told that Social Security, Medicare, and Medicaid are bankrupt, when really all that is meant is that they have become quite expensive, and some would no longer like to pay for these programs.
That's a choice between our national debt and our commitment to certain citizens, it really has nothing to do with bankruptcy.
So then why use the term? And why is the term used so loosely? I think we have to concede that the term is still morally powerful, despite all the rhetoric in 2005 about the decline of bankruptcy's stigma.
When we use the term "bankruptcy" we refer to something that is wrong, and needs to be corrected right away. The key question is whether the term is also being use to dodge or obscure other, more important policy questions.