Megan McArdle has a nice piece in The Atlantic pointing out that our bankruptcy process is more generous to firms and individuals than its counterpart in much of Europe. It provides a more effective cushion against a particular type of risk.
That generosity breeds frustration among the public, who tend to feel bankruptcy filers get off too easy. But McArdle notes that the system actually reduces the overall cost to taxpayers and enhances incentives for entrepreneurship. It both cushions and enables. Yes, some abuse it; yet as a society we nevertheless benefit.
Of course, similar considerations apply to other aspects of the safety net, such as unemployment insurance, and on those we tend to be less generous than Europe rather than more.