The quick bang solution:
Governement can change the state of unemployment and poverty in the USA, here's how, give each family unit 1 million dollars, throw it on the deficit its already over a trillion dollars. Everyone will then have the means to pay for any outstanding debts including mortgages, student loans, medical bills, credit card debt you name it under 1 million. People will then have the power and breathing room to begin supporting the economy from a fresh debt free perspective. How long before the country turns around after that? Pretty quick I'd imagine.
After thought, a better one:
I know its like reaching for gold from the stars for such a plan ever to be implemented. The government giving away $1 million dollars to each family probably would never happen. But practically its possible for government in this time of depression to do something else.
Perhaps look at each situation individually, each families issues individually. Our deficit is already a reality and government is adding to it even now, so before they use up all the hope money. Help the people. Some people live beyond their means because they want to convey status to others. They buy homes they can barely afford, fancy cars, frequent vacations, gambling habits etc These people should not be included but should be part of a debt relief program which forces them to re-evaluate their life style and financial means and establish a lifestyle based on what they can actually afford versus the status items which will have to be eliminated.
The other side of the coin, are those people badly in debt but not because of an over zealous lifestyle but because of life circumstance and the depression and things resulting from it like job loss etc. People like myself purchased a home within their financial means at the time. The debt to earnings ratio was balanced correctly. In my case my two cars were paid off one at a time until paid for before anything else needed was purchased. The Harley was bought in an attempt to have a vehicle with +50 MPG so that I could save money riding to school in order to get a degree so I could find a better paying job.
Sound decisions, but there are unsound unexpected occurances that change a balanced life very quickly like, Job loss, I have been unemployed for 2 years to no fault of my own. My wife continues to work. We accured medical bills while I was off which accumulated to an unmanagible amount due to one illness after another with my wife. My Student loans also became due for repayment with no money available to pay them. All these things cascaded to turn what was a very good credit family into a below average one. Now we sit in desperation, wondering if we can keep the home? What will we do if one more bad thing occurs? We need help. The government could do something about it but they sit idle.
One option is to evaluate situations like my wife's and mine as far as the mortgage goes. See what situation the owners are in financially then view the loan. Normal loan for a standard home not a custom or luxury home. Loan equity borrowed once to pay for initial educational costs for myself plus to eleviate some debts at the time of my enrollment. However, they will notice the loan is at 7% here's where governement can step in. There is no reason they cannot resturcture the loan to prime which is 4%? The monthly saving alone would allow my wife and I to dig our selves out from under at least slowly. That small bit of legislation to force not only banks but also private home loan companies like Washington Federal Savings to put all outstanding legitimate home loans meaning non-luxury purchases at prime or lower and resturcture the loan over the time remaining on the loan.
What a help just that would be. Of course there's always the super wishful thinking that the government could forgive half your loan and restructure the rest over the remaining time of your loan, even more help. Imagine how many homes would not be lost to forclosure if loans could again be managed by home owners? The banks are paying what now in millions or even billions having millions of foreclosed homes sitting on the market and not selling? Plus all the new never lived in ones that never sold after the bubble broke? There are ways to fix this and governement needs to look at the most humane ones. Politicians that worry about their budgets rather than saving Americans that voted for them should be replaced with ones that put the people first. We're entering a new millenium of humanity where capitalism will take a back seat to peoples needs. I hope government catches the bus with the rest of us.