I thought making debt some how more affordable, is what actually created all the toxic loans. If the loans are easier to pay off, people generally go into more debt, more lines of credit etc.
In oz our university debt(HECS), is not required to be paid off until you actually start work and earn over a certain amount. The government actually pays the debt provider, later you pay them back. Many moons ago University in Australia was FREE.

I think it is fubar. It could have been corrected a long time ago, but instead was inflated to world class bubble. The mother of all bubbles. Started with reagan, then the savings and loan bailout then this lopsided economic strangeness with china, bill clinton further deregulates a little under intense republican pressure, and then bush jr with his huge tax cuts tremendous increase in spending, much of it off the books even and the books are far cry from balancing. Bush's deruglation and all round bad governance has done it in entirely. Republicans take credit for the fall of communism ( which would have fallen anyway from its own total incompetence) but in reality, they have killed capitalism by forgetting that left/right and regulation/deregulation are like living systems, like birds who have to have two wings to fly. It was fundamentally a fundamentalist world view and this is no longer functional. No us vs them. Nuance and complication and real world ability to think and change mind. Obama very much gets this, but is inheriting a totally fubar system. He has same chance of reviving it as a child has of re inflating a popped baloon. But god must have sent him to help with this transition. He fits the new mold as well as bush exemplified the moronic characteristics of the old. Bush will enter human mythology as the new god of stupid. No drama obama and his lets think about it attitude will be new standard for human consciousness.
Completely new, reality based economic system will evolve fairly quickly making use of the web. That's what i think anyway.

It's a long article, but I read most of it. I found page 6 the most interesting. I really like the idea of home ownership becoming less of a goal for Americans and renting being the most common form of paying for a residence. It's interesting what he says about the government promoting home ownership over the years and that is the only reason we hold it in such high regard.

I also think it's a great idea if the banks would rent to the previous owners at market prices (lower than their current mortgage rates) for a determined amount of time, say a couple of years, at which time the previous owners could have the option to buy back at the current market rate when banks foreclose on a home due to the owner's inability to pay their mortgage payments.