This is an interesting discussion. At first blush, I would have to say that I agree with Ms. McArdle (who is pretty much responsible for the existence of this blog); I understand the notion that those defaulting on their debts aren't doing anything wrong - they are following the law and the stipulations in the contracts, so what they're doing is ok.
Then I wonder if we're confusing an out clause with a penalty. Bankruptcy isn't really part of a mortgage agreement or having a credit card. It's what you turn to when you have no other option.
The commenters on Ms. McArdle's blog make very good points (as they tend to), and compelling cases are made on either side of the argument.
Then I think, if you take out a loan and agree to pay it back, you should pay it back. It really is that simple.
My colleagues from the School Choice Demonstration Project and I just released the official third year reports on the Louisiana Scholarship Program (LSP)...