What to do about the Debt Overhang

I've been reading a bit about the expansion of the mortgage program.  We definitely need to do something about debt, but the resistance to lowering principle makes little sense to me.

What keeps nagging me though, is that while mortgage debt is the biggest problem it's also the most costly and at the lowest interest rate.  What about people that have racked up large credit card balances?  Especially people that also have mortgages, they need the credit card paid down more than they need the mortgage.

What I'd like to see, though there isn't a snowball's chance in hell of this even getting proposed, is a plan that would tackle all kinds of debt but that would include some sticks as well.  What I've got in mind is a low interest government loan as a one shot deal for debt consolidation.  The stick would be that these loans carry the same kind of provisions student loans do, once you have them, there's no way out.  But if this could slash your 12% a year credit card debt down to something like the prime rate (variable so real value doesn't decrease do to inflation, but prime is still always going to be a big step up) this would help a lot of people out, but doesn't exactly reward people for bad behavior (which is an overblown risk, the behavioral response to bailing people out isn't nonexistent but neither is it large as long as it's not frequent) because there's a downside.

This would also make some long term profit for the government, since it is still above the government's long term interest rate, though some may see this as a negative.

Haven't seen anyone even suggest this, but I couldn't help mentioning it when I see the kind of contortions going on with the loan program.  Obviously there would have to be limits on the program, like limited to debts incurred before 2010, maximum limit that can be refinanced, perhaps an asset ceiling (while I normally don't like means testing, due to the short term, non safety net nature of this suggestion I don't see most of my usual objections applying), etc.  Anyway, I just felt like dreaming out loud.