The Obama administration has various programs listed on the “Making Home Affordable” website that are supposed to get mortgage lenders to reduce interest rates, extend terms and/or reduce mortgage balances so that people can afford their mortgages. They use taxpayer money to induce lenders to participate. The rules exclude many of the homeowners that the programs were supposed to help. More than half of those who managed to get the modifications re-defaulted in a short time. The programs are failures, of course; but I digress.
Since the President thinks that rate reductions below market and writing down principal balances are such a good thing for the banks to do, I wonder if he has contacted the owners of the US debt and made the same suggestion to them. “What is good for the goose is good for the gander.” The nations creditors have lent us money that they know or should or should know that we can’t afford to pay back. I am sure the Red Chinese, Arab oil states and individual investors would quickly succumb to Obama’s power of persuasion and happily agree to forgive 50% or so.
Maybe he should send Senator Kerry around as his special debt forgiveness envoy. I remember when he was running for President, he said he could “jawbone” the OPEC nations to reduce oil prices. If he already has this “jawboning” ability with the Arabs, I am sure it would work on the Chinese as well.
Obama himself could use his campaign stops to exhort retirees to donate some of their bonds, bills and notes to the national debt. After all, he wants the banks to force their stockholders (which would include retirees and pensioners) to take a hit. I am sure they would be grateful to him for being asked and make a big contribution to his campaign. He could get AARP to sell the idea. After all, they got their membership to swallow a $500 Billion in Medicare cuts to fund Obamacare without a peep.