Reinhart Says Household Debt Restructuring in U.S. Would Stimulate Growth - Craig Torres

http://www.bloomberg.com/news/2011-08-05/household-debt-restructuring-would-spur-growth-reinhart-says.html

A restructuring of U.S. household debt, including debt forgiveness for low-income Americans, would be most effective in speeding economic growth, said Carmen Reinhart, a senior fellow at the Peterson Institute for International Economics in Washington.
“Until we deal head-on with the fact that some of those debts are not ever going to be repaid, we will continue to have this shadow” over growth, Reinhart said today in an interview on Bloomberg Television’s “Political Capital with Al Hunt,” airing this weekend.

Reinhart is about as "free market" as you are going to get, but here she advocates reality: taxes are going to have to be raised and some good portion of those billions of dollars worth of loans given to non-credit worthy Americans are going to have to be written off, taken off the books as future revenues.