Outside of the SV bubble, it's extraordinarily difficult to fail without seeing your credit take a serious hit. And boy howdy is getting back on your feet hard when you (a) can't get an apartment, and (b) find yourself getting screened out of otherwise available jobs. Forget getting money on loan, this is just getting access to the basics of economical survival - work to do and a place to sleep.
The fact that we punish economic failure by making economic success even harder to achieve is evidence of the deep insanity within American culture. Sink or swim is a misnomer. Swim or be drowned is closer to the mark.
So it's great that we're making technical progress on every front imaginable. But how many of these advances see their promise still born in a culture that pays more attention to recycling its trash than the people it discards on its streets?
This winner-take-all/losers-get-ruin problem goes way beyond the business cycle. As Reuters noted a couple of years ago, entrepreneurship has been suffering a decades-long retreat. Having peaked in 1987, it's declined precipitously ever since.
http://www.reuters.com/article/2012/05/02/us-usa-economy-bus...
In just about every way imaginable, SV is the exception not the rule. For those who are young enough, smart enough, skilled enough, male enough, credentialed enough, connected enough, unencumbered enough, and possibly delusional enough it's great. But strike any one of those factors from the list, and watch the curve get steep. Start crossing off two or more and the odds on the lottery start looking good.
Those are the odds that the rest of America sees. So it's no wonder they're backing further and further away from risk, regardless of the long-terms costs the country. Until this country has a social contract that's worth a damn, people are going to be very adverse to even the slightest setback. And for good reason.
After all, there's a big difference between the kind of failure that can be chalked up "a valuable learning experience" and failure so catastrophically crushingly severe you never, ever, get back on your feet. There's a lot of that in America. It's where the Fear comes from. That's what drives most people. Not dreams of being one of the great or the good. Those are luxuries for the fortunate few. Most people just live in constant dread of being thrown in the street.