I believe student loans can be written off after 25 years. Not sure the exact details. I know med school loans can be paid off based on income and if your income is low enough (almost never happens) you don't have to pay anything.
I'd nitpick a few things, but I think overall your points are valid. However, I would say a bigger cause is the replacement of small firms with larger ones. As the US has shifted more to a service economy larger firms have better economies of scale so it's harder to compete as a small firm. Plus, the pace of technological innovation is slowing so there are fewer opportunities to hitch your cart to some emerging technology.
Also, I believe their definition of startup is not what most people on HN think of when it comes to startups. It just means newly formed businesses, the vast majority of which are small, non-VC funded businesses.
> I believe student loans can be written off after 25 years.
The forgiveness of student loans is considered taxable income. The WSJ ran an article a couple weeks ago, a dentist had over $1M in student loans and projected to have $2M when the forgiveness kicks in, at which point he would then owe $700K in taxes.
Short answer: dental school is expensive (average $91K/year), he's an orthodontist (which requires 3 years of specialized training on top of 4 years of dental school on top of 4 years of college), tuition went up significantly when he was at school, and compounding interest is brutal when you owe a lot over long periods of time. He's also on IBR, which means the sum will keep compounding and the principal will just be wiped clean once he's made payments for 25 years.
I can see that being realistic. A quick search shows a University near me estimates it will cost someone just over $70 000 per year of undergrad at that school. Then you have four years of dental school. Another school near me lists tuition alone at about $270 000 for the four years if you're out of state. Then add 3 years of a specialty like orthodontics. Another search shows UPenn estimates that'll cost over $115 000 per year.
70k * 4 = 280k for undergrad
270k for tuition alone for dental school
$115k * 3 = 345k for a specialty
This gets us to just under $900k. That doesn't include any costs except tuition for the 4 years of dental school so we can assume the total will probably be higher. You can reduce some costs like the undergrad and if you're accepted to an in state school that might make dental school a bit cheaper but it is still an expensive undertaking.
> I believe student loans can be written off after 25 years. Not sure the exact details. I know med school loans can be paid off based on income and if your income is low enough (almost never happens) you don't have to pay anything.
I would frankly rather not have had 25 years of a ticking debt hanging over my head. I'd be almost 50. Maybe some people can see that far into the future and are comfortable with it, but I judged it an unacceptable risk.
Re the economies of scale, I don't think you're wrong per se, but third order effects have a lot of contributing causes.
> Also, I believe their definition of startup is not what most people on HN think of when it comes to startups. It just means newly formed businesses, the vast majority of which are small, non-VC funded businesses.
Ah, the ones where you submit a business plan and get a bank loan that you have to pay back. ;-) IMO, that's riskier than VC work; you walk away with a fat pile of debt if the biz fails before a fully formed corporate veil is established. Recall that sole owners don't have veils, as they personally sign for the debt; after a certain point of size that doesn't happen.
The ability of the median person to survive if their venture explodes is, to me, the critical point in founding a venture.
There's probably a very useful economic history of small biz/startup failure for the past 200 years. I wonder if it's been written yet!
Small firms have always gone out of business or grown, or been bought up, its their creation rate that has dropped off causing the ration of small/large to change.
I'd nitpick a few things, but I think overall your points are valid. However, I would say a bigger cause is the replacement of small firms with larger ones. As the US has shifted more to a service economy larger firms have better economies of scale so it's harder to compete as a small firm. Plus, the pace of technological innovation is slowing so there are fewer opportunities to hitch your cart to some emerging technology.
Also, I believe their definition of startup is not what most people on HN think of when it comes to startups. It just means newly formed businesses, the vast majority of which are small, non-VC funded businesses.