> 2. How do we prevent individuals from spending recklessly? Seems like government is going to have to play a large part in that story.
The Reserve Bank of India (India's equivalent of the Federal Reserve) does this by encouraging saving in small ways.
In India, savings accounts are the default for retail individuals, not current/checking accounts. Most banks only permit you to open an interest-free current account as a business account. The small amount of interest earned in a savings account acts as some incentive to keep the money in it. I believe no overdrafts are permitted on savings accounts either, so easy credit in the form of spending more liquidity than you have becomes just a little more inaccessible.
The Reserve Bank of India (India's equivalent of the Federal Reserve) does this by encouraging saving in small ways.
In India, savings accounts are the default for retail individuals, not current/checking accounts. Most banks only permit you to open an interest-free current account as a business account. The small amount of interest earned in a savings account acts as some incentive to keep the money in it. I believe no overdrafts are permitted on savings accounts either, so easy credit in the form of spending more liquidity than you have becomes just a little more inaccessible.