Bankruptcy law seen hurting entrepreneurship

NEW YORK (Reuters) - A new law that makes it more difficult for Americans to file for bankruptcy may hurt the nation's economy by discouraging entrepreneurs from taking risks, according to a study released on Wednesday.

The study argues that government data has greatly undercounted the number of bankruptcy filings caused by business failure.

"There are as many as nine times more bankruptcies involving a business than the current government data suggest," it said. The undercounting has led to an erroneous perception among policymakers that nearly all bankruptcy filings are by overextended consumers.

The new law may dampen the formation of new businesses, the authors argue. This could have serious consequences for the economy because most new jobs are created by companies less than three years old, they said.

Bushco with more fuzzy math.