Since the beginning of the recession, economists have made the case that the key to recovery lay in increasing consumer demand. That increase has been slow in coming for many reasons -- such as the oppressive weight of consumer debt, under which American families spend hundreds of dollars each month on credit card bills instead of putting that money into their local economies.
Let us establish a debt forgiveness program, in which all eligible debt is given a significant mark-down and placed on an interest-free payment plan. In turn, participating borrowers agree to remain ineligible for new credit products for the duration of their participation.
It's a simple, orderly way to reduce Americans' debt burdens and unleash billions of consumer dollars into a still-recovering economy.