What they are all missing is the fundamentals of capitalism. Consumption drives the captialisitic economy. So, some sort of debt cancellation HAS to happen. Whether it is a borrower bail out like the one being proposed above or a bank bail out like the one BofA is requesting, money freed up from debt will go back into hands of consumers to be put toward consumption and thereby reanimating the stagnant economy.
As unglam and undesireable a bail out sounds to us all, one cannot ignore the fundamentals of the American economy and that 70% of it is driven by consumption. So, as much as we want to teach foolish buyers and greedy banks a lesson, we can’t properly do it without scrapping capitalism.
It’s horrible, but like war, debt cancellation is great for business.
