1) all the wealth in the world is generated by individuals / businesses. Governments just harvest a share of that. If companies stop making money then government backed paper (cash or bonds) lose value just as the companies shares lose value.
2) In the current environment, if there are large market falls central banks will print money.
Whilst individual company shares are risky there is little reason to see why they, as a class, should be riskier than cash or government backed bonds