morph366

Avoiding Global Deflation: Don't Rely on Keynesianism

Re comments from Smarty Pants

Where is the security for those who agree to write off (or 'invest' in) past debt in return for a part of future earnings when there is no collateral to fall back on in the case of unexpected injury, death, or outright fraud?

As suggested in the article the framework - admittedly it is no more than an idea in gestation at this point - would have to resemble a debt for equity swap. The point is not for the seriously indebted to swap one form of debt with collateral backing for another kind of debt. That's also why it is not as Smarty Pants suggests a form of servitude or slavery lite.
The replacement claim is a pure risk capital play as indeed all equity investments are.
The point that was being made can also be described as follows - Why should Joe the Plumber bear all of the risk for his own, and for that matter, the entire economy/banking system's, miscalculations about the soundness of the global economy?
Sure there will be a risk in taking a chance on some form of equity instrument that allows for participation in the possible future prosperity of lots of currently distressed individuals and small businesses, but how much worse would that be than seeing governments continuing to pile up mountains of inter-generational debt?