[mikeash]

Regarding your last paragraph, there's a huge difference between a typical mortgage and buying a toaster with a credit card.

Specifically, people typically use credit cards with the intent of paying them off quickly and by applying their normal income stream to paying it. The resale value of the item purchased doesn't matter at all in that scenario, only the usefulness of actually owning the item.

Mortgages, on the other hand, are rarely taken out with the intent of paying them back in that way. The typical mortgage term is 30 years and few people anticipate staying in a house that long. Most mortgages are taken out with the intent that the bulk of the loan will be paid off by selling the house. Negative equity completely screws up that plan, which is why people get so upset about it.

That's not to say that credit card debt is somehow wise in many cases, but toasters and houses don't compare well here.