When Bank of America announced this month that it was going to reduce the mortgage balances for some underwater homeowners, the news didn't set off the usual flurry of critics complaining that these people were getting an undeserved break, notes Nicole Gelinas in the Los Angeles Times. "The apparent evolution of public opinion is healthy," she writes. "It's just too bad that it took so long."
This isn't pity; it's smart business for everyone. The fact is, the US economy is going to suffer as long as our collective mortgage debt remains so high, writes Gelinas, who knocks down the various arguments against providing such debt relief, including the "moral hazard" favorite. Would people really rather have an empty, rotting home next door than see that neighbor get a break? With our "misguided attempt" to punish those who got slammed in the housing crisis, "we imprison the entire economy in hundreds of billions of dollars' worth of debt shackles." Read the full column here.