I think a better goal may be to make plans affordable. Loans are a valuable tool, if they’re at a decent rate, so restructure them. Interest never compounds. Rates have to be reasonable. Payments always come out of principle, with interest tacked on and paid at the end of the loan’s life. It’s also a reeeeeeally hard task to say just “make things affordable”
I think the most generous interpretation of what they seem to be trying to explain is the “phantom plans” created from loaning loaned money.
A deposits 1k into bank Bank loans B 1k B loans C 500
There’s only 1k in circulation, 500 in B’s hands and 500 in C’s, but there is technically 1500 in total loans.
I could be off base that this is what they’re talking about, and I don’t necessarily think it’s all that relevant to the conversation, just spitballing.