If they don't pay up, why not lock 'em up?

The federal government should clean up the home-mortgage mess by:

a) Crafting and implementing new loan regulations.

b) "Encouraging" lending institutions to restructure payment schedules and even "forgive" significant chunks of debt.

c) Both a) and b).

d) Reviving debtors' prisons.

The cranky case for d):

Voters demand "accountability" from government. Why shouldn't government — and lenders — demand the same from folks who willingly make sucker's bets on adjustable-rate subprime mortgages? Why shouldn't anybody whose personal fiscal irresponsibility fuels our rising collective fiscal peril be required to pay not just a debt to a creditor but a debt to society?

Instead, politicians, on a bipartisan basis, will choose answer c).

President Bush on Aug. 31: "I strongly urge lenders to work with homeowners to adjust their mortgages. I believe lenders have a responsibility to help these good people to renegotiate so they can stay in their home. And today, I'm going to outline a variety of steps at the federal level to help American families keep their homes."

Among those steps, which Bush insisted won't constitute a "bailout" and which many Democrats complain won't go far enough: Making federal mortgage insurance easier to obtain, reducing taxes on the amount of debts forgiven, and, in the president's words, "improving disclosure requirements to ensure that lenders provide homeowners with complete and accurate and understandable information about their mortgages, including the possibility that their monthly payments could rise dramatically."

Hey, if you're old enough to take out an adjustable-rate loan, aren't you also old enough to know the definition of "adjustable"?

Caveat emptor (let the buyer beware).

Lenders also should beware — especially now that they're paradoxically cast as villains for being too lax and too strict about who gets their money.

In Charles Dickens' "David Copperfield," the title character gets a childhood lesson on the risks of reaching beyond one's financial grasp — at least in 1820s England. He visits the family's landlord, Wilkins Micawber, doing debtor's time in the King's Bench Prison:

"Mr. Micawber was waiting for me within the gate, and we went up to his room (top story but one), and cried very much. He solemnly conjured me, I remember, to take warning by his fate; and to observe that if a man had twenty pounds a-year for his income, and spent nineteen pounds nineteen shillings and sixpence, he would be happy, but that if he spent twenty pounds one he would be miserable."

Dickens said he based that scene on a real-life admonition from his father, who did a debtor's stretch of his own in the Marshalsea Prison.

OK, so debtor's prison now, as then, would rarely be profitable for either side of a lapsed loan. Some lenders now, as then, take advantage of gullible borrowers. Some borrowers just want nice homes for their families, not "flipping" opportunities for speculative profit.

But borrowers and lenders aren't the only losers when the number of unpaid loans climbs into the danger zone. From Wednesday's Wall Street Journal:

"Tremors from the housing market's slump are straining the budgets of state and local governments from coast to coast, sending officials scrambling to plug gaps. Rising defaults on subprime home loans are boosting the inventory of unsold homes and driving sales prices lower. That's cutting into building-permit fees, taxes on contracting and recording property transfers and other housing-related sources of revenue."

Easy credit, hard times?

Letting housing-market forces take their corrective natural courses — with or without debtor's prison — would at least boost the affordable-housing supply. Only they won't, because Washington's primed to counter the subprime problem with no-fault defaults.

Swell. If we imagine "rights" to government-guaranteed (translation: taxpayer-funded) health care, child care, retirements and college tuitions, why not a "right" to mortgage bailouts?

From another Englishman with a way with words: "Neither a borrower nor a lender be; For loan oft loses both itself and friend; And borrowing dulls the edge of husbandry."

Our sense of husbandry (thrift) has dulled considerably since William Shakespeare wrote that wise advice from Polonius in "Hamlet."

We'll pay long-term prices for rewarding homeowners who spend far beyond their means and politicians who spend far beyond our means.

Then again, if we all quit borrowing and lending today, our economy would collapse. So let the inevitable mass mortgage bailout — or the euphemism of your choice — begin.

But before taking out or issuing another loan, review the meaning of "adjustable."

Frank Wooten is associate editor of The Post and Courier. His e-mail is wooten@postandcourier.com.