Yeah, interfering with private contracts (like the screwing over the Chrysler secured bondholders took at the hands of Obama and Rattner, who just quit) creates all kinds of questions and uncertainties.
It will raise the cost of capital, or cut it off completely, to companies experiencing financial troubles, due to fears that Obama socialists will simply void their collateral.
But for me, I wouldn’t bet on them somehow replacing a 5% mortgage with an 8%. It would be much easier to just raise taxes, stealthily, as they are doing now, IMO....
My theory really did not have anything to do with the government raising taxes for their own coffers, but was meant to be an effort by the government to alleviate losses by the mortgage and finance companies due to inflationary pressures. 5% mortgage payments during 20% inflationary times results in lots of losses by the financial industry. Monetary value losses, not dollar quantity losses.