As an alternative to debt forgiveness for those who are finding it hard to pay mortgages for houses that are in significant negative equity I have to wonder if the creation of a tax debit charged against their future estates for a portion of the mortgage might be an idea. It would in effect defer but not eliminate the mortgage debt and lighten the load of servicing their mortgage repayments.
If you took 40% of the principle of a mortgage away from someone that would make their mortgage significantly more manageable and if that 40% would only grow inflation minus 0.5% and was redeemed against their estate upon their death we wouldn’t necessarily be losing that much money in the long run. Of course there would have to be safeguard to ensure people didn’t spend every last penny before popping their clogs but the idea itself has some merit I reckon. I’m much prefer that to simply writing off 40% of someone’s debt.