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Lumifer comments on Rationality Quotes Thread November 2015 - Less Wrong
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The example given is explicitly labeling certain debt as "not expected to be paid back if there are troubles", so that someone who buys that knowingly accepts the risk. That's more substantive than just defining it away, although the catchy way in which it's worded might not give that away.
That will only work if you label all debt in that way, since you cannot have 100% certainty of any debt being paid back. And this means that there will be no real difference in the world except that people realize that debts are not always paid back, which they ought to realize anyway. It does not prevent anything bad from happening, just as my redefinition of "bad" does not.
And, of course, people do that. It's called a "credit rating" and there are a few large institutions which assign ratings to bonds. Pretty much all bonds traded in financial markets have credit ratings.
And one of the big issues leading to the financial crisis was that a lot of these ratings were wrong and a lot of AAA bonds defaulted.