Debt Forgiveness and Two Underwater Households. Two households both have loans on their homes that are “underwater.” Household A has other assets such as checking accounts, but Household B does not....

Debt Forgiveness and Two Underwater Households. Two households both have loans on their homes that are “underwater.” Household A has other assets such as checking accounts, but Household B does not. What does the research show about the effects of reducing the amount each household owes on its loans on the spending by the two households? (Related to Application 3 on p. 290.)