The governments of developed countries have the power to rescue economies from defective finance. There is a radical solution. It would be relatively easy and at least as fair as the current slow generation-long recovery from the 2008 financial collapse.

I have been suggesting massive “start from scratch” financial reform for several years. The response is usually a mix of incredulity (it’s too hard to do) and indignation (it would be unjust). A thought experiment might help deal with those objections. Pretend that the current situation – excessive debts and deficits, unprecedented and risky monetary policy, overly powerful banks, slow GDP growth and unacceptably high levels of unemployment – was the result of a recent war.

Under those tragic circumstances, it would not be strange to say that the prevailing financial order was a relic from a lost period. Perhaps the arrangements were effective and fair back then, leaders would say, but the old promises, practices and privileges are now helping the few, hurting the many and holding the economy back. So finance needs to be reconstructed.

The experience after the Second World War provides an encouraging precedent. Strong German and Japanese governments led the rebuilding of devastated economies. Surely the developed countries of today could manage the much easier task of rearranging financial obligations.

Here is a simple post-pretend-war agenda.

Recalibrate debts. Debt writeoffs are not ideal – obligations should normally be honoured – but it’s better to restructure national balance sheets than to allow excessive debts to discourage job creation and investment. Writeoffs can also serve social justice when the debts in question are owed by the relatively poor to the undoubtedly rich, so often the case in increasingly unequal developed economies.