Some free market fundamentalists like Ron Paul maintain there should be no loan modifications for people who've gotten behind in their mortgages or for homeowners whose mortgages have fallen underwater due to market conditions and no fault of responsible homeowners. Conservative economists, however, have come around to the notion that large-scale, taxpayer-funded mortgage modifications are necessary. Click.
The crushing volume of personal debt is an unaffordable drag on growth. "Simply put, you can't operate an economy where huge numbers of people are desperately in debt and have no real way out," argues Kenneth Rogoff, an advisor to John McCain's 2008 campaign.