The call

Bloomberg offers up this piece of not very surprising news:

European Union finance ministers pledged to stiffen sanctions on high-deficit countries and ruled out setting up a mechanism to manage state defaults, saying no euro country will be allowed to renege on its debts.

I view this as the number one policy question facing the global economy today.  Do you favor patches to keep the current system up and running, or do you think we need an as-smooth-as-possible combination of defaults and devaluations?  I fall into the latter camp and I believe that no such feasible patches exist.  I believe that Hayek — not of The Road to Serfdom but rather the critic of rationalist constructivism — is being vindicated more and more every day.  Do any current European leaders understand his perspective?  We will see.

Which path shall it be?  What's your call?

From Angus, here are some harsh words, but on spending I cannot say that I disagree.  I am often a Keynesian methodologically, yet in practice I am usually quite skeptical of fiscal policy.