I think I heard on the news the other day that Obama wants to save people as much as $3000 per year by refinancing their debt.
The thing of it is, refinancing postpones the payments but does not reduce the debt. That's why it is ineffective policy.
Iceland forgives mortgage debt to save its economyby: J. D. Heyes
It's probably not a concept that most U.S. banks and lawmakers want to think about, but the fact is, Iceland's economy has grown by leaps and bounds since the government there implemented widespread debt forgiveness for many of its citizens.
There is a difference between refinance and forgiveness.