I have been having a running debate with one of my investment bank friends (call him Mike) about how to stimulate the economy. His essential premise is that below-water mortgages (where the value of the home is less than the outstanding mortgage) are causing banks to freeze lendable assets in anticipation of being forced to write down potential bad loans in the inevitable event of a homeowners default. If the government “covers” the portion of the account underwater and allows the bank to remark...