The system has reached extremes that can no longer be rebalanced by policy tweaks, borrowing another couple trillion dollars or inflating asset bubbles. What ails us can be rectified by adjusting (ahem) assets (collateral) and debt to rebalance the extremes that are destabilizing the system from within.
Whoa…. This is a really radical plan to rebalance the economy and political life of the country and world. He leaves out the effect upon all of the foreign creditors that are holding the debt instruments. He also ignores the effect upon people with investments for retirement.
However, when all is said and done, perhaps this is a reasonable suggestion.