The author is a Reuters columnist. The opinions expressed are his own.

Taxpayers have much at risk in the coordinated action that six central banks took this week to lower short-term interest rates and make it easier to issue dollar-denominated loans to cope with the European debt crisis.

The joint action on the last day of November is being characterized widely as buying time to deal with the European government debt crisis. But fears about whether the PIGS -- Portugal, Italy, Greece and Spain -- can pay back their debts in full are just a symptom of a metastasizing economic disease that has been plaguing the West for three decades. That is where the risks to taxpayers come in.

The disease was man-made, a policy virus cooked up by the Chicago School, where leading theorists persuaded the world to cast aside four millennia of human experience in favor of their radical legal and economic ideas. They have achieved this by couching their plans in language that made them seem conservative when the theories were the antithesis of conservative, at least in the classic meaning of that word.

Among these ideas is that inflation is everywhere a government-created evil that must be fought at all costs, that financial institutions operate best with little to no regulation and that fraud laws are an anachronism in securities markets. In line with this, deflationary pressures are ignored and prudent investment houses become casinos charging hefty fees for derivatives that by their nature destroy wealth while frauds flourish in the form of mortgage securities perpetrated by banks and Wall Street.

The damage is now done. The price must be paid.

WHO WILL PAY?

Who bears this price will determine whether we face the scary risk of inflation or the even scarier prospect of deflation. Will those who benefited from these policies bear the price? Or, as with the 2008 U.S. financial meltdown, will it be taxpayers?