| As the Eurozone contemplates the possibility of Greek default, American pundits are boasting about US federalism. American states, they say, would never allow the fiscal irresponsibility that plagues Eurozone countries. And when states do lapse, the country’s leaders do a better job of putting accounts back in order.
These pundits ought to know their history. In fact, the US has experienced a very similar crisis, in which one third of state governments defaulted. That crisis only ended after years of wrenching political change.