Actually there is a very good chance it would work, the vast majority of people have no problems with the current system and adding blockchain to the mix is going to be an upgrade and benefit everyone by increasing transparency, efficiency and lowering costs/fees. A government backed coin would be far easier for the masses to adopt than Bitcoin.
Except that if I understood it correctly he's proposing not to use a blockchain. The only way difference I see to what we have today is that it would cut out the banks, people would hold a balance directly with the government, who would say how (or if) they could spend their money. The only possible positive I can see is that in such a system taxes would not be necessary. As Junko says, good luck with that.