It's Personal: Time to get real with Greece's financial crisis - and America's

The headlines this week were dizzying:

German politicians fretted for the umpteenth time about Greece's teetering on default for the umpteenth time. President Obama proposed a millionaires' tax named for tycoon Warren Buffett in a bid to boost the anemic coffers of the U.S. Treasury; Republicans dismissed it as "class warfare."

The impulse to turn down the volume must have been strong for ordinary Americans, a lot of whom are unable to see how any of it affects their lives. It's complicated stuff, this talk of debt threats, default, and Show Me the Money.

But these persistent crises have been even harder to understand as politicians have larded things up with anger-stoking distractions rather than actual solutions that - guess what? - cost money.

The wiseguy world of mobsters offers a provocative crib sheet that may be helpful, given how Tony Soprano analogies are more digestible than think-tank manifestos.

Imagine you sit down for a glass of Chianti with a loan shark. He tells you he's in a high-risk, high-reward line of work. He lends out dough at high interest and expects to get it back by throwing mob muscle into debt collection.

But sometimes, he explains, no matter how big the brass knuckles or how loaded the gun, no matter how angry you are that the mook who owes you money isn't coughing it all up, a bad debt is a bad debt.

And sometimes, he says, the only way out is to take it on the chin and move on.

When will banks, governments, and citizens accept that the time has come to take it on the chin?

Politicians on both sides of the Atlantic have been loath to acknowledge, at least publicly, that simple addition and subtraction have created problems that now require painful solutions if we are to save ourselves.

In the case of Greece, the government owes Western European banks more than it can afford to pay back, thanks to years of being granted reckless loans.

Draconian cuts the government has made to the Greek economy so far - pension reductions and other austerity measures that some say are now tearing at the country's social fabric - have further harmed its economy. So there is even less money flowing to the government for paying back the banks the full value of the debt they issued Greece in the first place.

Fellow eurozone nations such as Germany, with its potent economy and strong incentive to protect the common currency, have tried to finagle a nonsolution that placates its own irate citizens by doing little to fix the problem.

Germany's approach has been to try to make Greece cough up all the money it owes rather than allow it, like a bankrupt company, to restructure the loans.

According to this dream-world approach, the banks avoid big losses, and other debt-soaked eurozone nations, such as Italy and Spain, continue to try to make good on their own sizable obligations.

If German banks were forced to take a hit by reducing Greece's debt, there would be pressure on the German government to shore up those banks with bailout funds from none other than the German taxpayers.

This approach has worked about as effectively as giving Tylenol to kill a tumor.

Every few months for more than a year now, Greece has returned to the brink of default and politicians have resumed their hand-wringing. Meanwhile, Greece becomes only weaker, as was borne out this week in a harrowing Wall Street Journal story about the suicide rate there being on the rise.

"The Germans do not want to pay this bill. Do not," said Nariman Behravesh, chief economist at IHS Global Insight.

Restructuring Greek debt is considered a viable solution, Behravesh said, but it's risky in the short term for politicians: "What they need to do is politically sort of unacceptable to the German public."

America's debt problems are nowhere near as acute, and our nation's economy is still quite strong. But without measures to raise government revenue and cut expenses, the situation will surely worsen.

What action has been taken, then, to strengthen the federal balance sheet?

You might recall that shameful debacle earlier this year, when the Obama-led effort to come up with a plan that raised taxes while cutting some federal programs was nearly obliterated in political brinkmanship.

The people with power pulled off a pin-striped-suit version of pounding their fists in their cribs rather than pushing through tax increases with cuts to federal spending.

The problem before us began with GOP-led tax cuts, worsened with a bipartisan spending spree, and needs to be fixed. Period.

Higher taxes on millionaires? Changes to underfunded federal entitlement programs? Fees on corporate jets? Bring it on - or else.

"I'm sorry," Behravesh said, "but this is the way it is. We all spent like there was no tomorrow. The piper must be paid at some point - and here we are."