You might not guess it judging by the riots, the chaos, and the general unhappiness swarming the nation, but I look at the situation in Greece with a distressing mixture of both pity and full-blown envy. Pity, because the Greek people are in the middle of adjusting to a new economic reality that brings with it much physical and emotional pain in the short term. Envy, because I know that over the long term, the country has made the right decision, whereas we in the U.S. have not. What Greece has just done, we should be doing ourselves, or planning to do soon. For a variety of bad reasons, however, we cannot and probably will not make similar choices. It just might crush us in the end.

Lessons from high school
When I was a freshman in high school, I had an English teacher who took pleasure in randomly calling on students to recite various classical themes by memory in front of the whole class. Cruel, but highly effective, I remember a lot from that class, including Aristotle's definition of the term tragedy.

According to the ancient philosopher (and my own imperfect memory), a tragedy is the story of a better-than-average man that, because of a grave error in judgment, falls from a high place in life to a very low one. Witnessing this terrible development of events, the audience is expected to experience two principle emotions: pity, because they feel bad for the man whose luck has changed, and fear, because they realize that this same fate could easily befall themselves. The irony, of course, is quite clearly at hand.

Aristotle was right
Today, we stand on our distant shores observing the Greek tragedy, counting ourselves lucky because of the relative stability that still pervades our institutions, our currency, and our streets. But the emotion we should really be feeling at this moment is fear. You see, starting from the very day budget cuts were authorized, Greece took its first steps in the right direction, steps that involve curtailing vast entitlement programs and reining in massive budgetary shortfalls, steps that the U.S. knows are necessary, but has and will continue to put off for as long as is humanly possible. This is why I am envious, and this is why we should all be scared.

Not unlike leaders in other parts of the world, leaders in the U.S. are a short-sighted bunch, much more concerned with being reelected than actually making good decisions. Consistent as most politicians are in the department, my guess is that our leadership will not be taking a hint from the Greeks. We will not bite our collective lips, do what's best for the country, and take a machete to our national budget. Still unaware that carrying massive financial obligations over sustained periods of time creates bad things, our politicians prefer to bury their heads in the sand and maintain the status quo, because that's what the public supposedly wants. What our leaders fail to consider is that the status quo as it stands today cannot be held into infinity. Believing that it can is naivety at best and dreadful maliciousness at worst.

It's on us
It is important to note that Greek politicians deserve little admiration in this situation. Rather than pursue these measures proactively, the Greeks have had great measures of austerity thrust upon them by a larger monetary force that offered no realistic alternative. But, once again, I am actually somewhat envious of their situation.

The European Union's strong-arm tactics actually made the difficult, but necessary, process of cutting the Greek national budget quite a bit more palatable for the officials involved. Rather than accuse each other of bloody murder, Greek politicians can save face and forever pass the blame onto those greedy Germans. This is an advantage that Americans do not have. With our super-power role in the world and the dollar's status as the globe's currency of choice, the buck, so to speak, starts and stops here. No one will force us to make these changes.

Ironically, because of our vast strength, our nation's blindness may last until the very day that there's no more demand left for yet another T-bill or another cent of our ever-expanding debt. Only then will we see just how far we've come, after all faith in the system has already been lost. The question I ask is this: Why on earth would we not want to make these decisions on our own terms rather than at the mercy of unhappy creditors who may be eagerly anticipating such a moment of weakness?

Make the tough decision
I come at this argument not from the perspective of a politician on a pulpit or an economist with an axe to grind, but merely as an investor who studies balance sheets with great intent. What I know is that we are currently spending at rates that are unsustainable. Our deficits are large and increasing. Our national debt is expanding at a rate that is historically death-defying. Our entitlement programs are dangerously underfunded even as the strain upon them grows. We have a bad problem, and we're just making it worse.

Let me say also that I am not some far-flung Austrian economist, prophesying doom, seizing up bags of grain and bars of gold. Some level of debt is a good thing, especially for a country with so much relative strength. But, there are limits to such a system. There is a point at which the system breaks. The time has come to at least begin to address the issues that will eventually cripple this country. Once a system like ours, one that is based on the full faith and credit of the government, is broken, it is not easily repaired, if at all.

The Foolish bottom line
What we need is our own great measures of austerity. We need them today. In order to properly structure this nation for future success, we need to make a few tough decisions now. Unhappy as this may make the greater public and those seeking reelection in November, I crave it. Like Greece and many other nations out there, it's time to bite the bullet. With a projected national deficit this year of $1.5 trillion and an existing debt of $13 trillion, the time is now.