[quote=davelj]….
If mark-to-market accounting were required of most US citizens, a large percentage of them would be in “receivership” (re: bankrupt) as well. (That is, their liabilities are greater than their assets on a liquidation basis.)

To use an obvious example, consider just about every college student that graduates with a student loan…[/quote]

For the recent graduates with a student loan, their major asset is their future earnings. Hopefully, even a conservative estimate of those earnings far exceeds their debt. If not, then there is a bad debt issue.

For the banks, aren’t some of the future earnings capitalized, at least on a conservative basis? If not, it seems reasonable to do that. Why? To separate those that should be shut down from those that should be allowed to live, and in a transparent way that can be subjected to questioning. (It doesn’t have to be radical, just add and publish the calcs to the normal reports that don’t capitalize any future earnings.)