This is an interesting talk on how to target a major problem in the current US Financial Crisis.
Economist - Atif Mian showed one of the main problems in the current crisis is because nearly 31.4% of Mortgage Holders are under water by the tune of $1.2 Trillion Dollars in total.
He showed a direct coorelation between Housing prices drop and consumption. The effect is not uniform around the country.
You can see a marked difference between High leverage counties vs. Low leverage counties. Most of the problems are in High leverage counties.
His recommendation is finding some method to write down principal for Under-water Mortgages. Unfortunately, we know in our current political environment this will never happen.