One of the most unwise decisions that you can make is to guarantee the loans or the actions of someone else. We see in this proverb that the foolish man who lacks any sense will shake hands (that is what pledges means here) and will become a guarantor for another. The idea here is not, as some state, that we should refuse to make promises or shake hands at the close of a deal. The idea here is the kind of deal that is being made - and the foolishness of thinking that we can control another man's actions.
Recently our nation has had a dose of what this brings. Our congressional leaders wanted the votes provided by expanding home ownership to more people. They did this by strong-arming bankers to begin giving loans to people who by all financial indications could not pay them back in the future. The banks, knowing that the government could make their lives miserable, did just that. Things looked great for a season as money was loaned and building projects went through the ceiling. But there was going to be a price to pay later that was completely ignored. That price came due when those who could not handle the amount of money that was loaned began defaulting on their loans. That is the danger of becoming a "guarantor" in business dealings. This was even more dangerous since the guarantor was not allowed to do "due diligence" any longer by congressmen who arguably had never had to run a business. The end was that an avalanche of loans defaulted - and guess who was left holding the bill? Well, if you don't know, it was you and I - or at least our tax bill when our elected leaders eventually hand it to us.
All this could have been avoided if we would only follow the wisdom of Scripture. Of course that ship has already been sunken by our leaders who say that such talk is a breach of separation of church and state. The problem is that first, such a separation is not in our constitution - and second, God's principles are only ignored by those who will find them true to their great detriment when . . . when the bill comes due.