Chances are you’ve probably heard someone say those words in the last few months. Greece, Spain, Italy, Portugal, are all members of the Eurozone and are having various financial problems. But I live in America — why should I care what’s happening to a bunch of whining Europeans who live 5,000 miles away?

The Eurozone Will Affect You In Two Important Ways

For starters, America no longer does all its business within it’s own borders. America is a major player in a growing global market, and that also puts you on the playing field. The Eurozone is responsible for about 26% of the total business of the United States. And, along with China is one of our largest trading partners.

In addition, banking, which we are all quick to throw under the bus has also become global. A significant amount of our debt is held, not only by China, but also our friends in the Eurozone. Italy has money in French banks, French banks have money in German banks and German banks have money in US banks. All this interconnection between banks, countries, and investments, will play a big part in how your future retirement plans, or 401(k)’s will turn out.

I suggest you pay less attention to “American Idol” and more attention to what’s happening in the world that directly affects you and your paycheck. If you are down on Wall Street demonstrating in front of some big name bank you are pointing the finger at the wrong people.

What is the Eurozone?

There are 27 countries in the European Union. Seventeen of these countries comprise the Eurozone and use the Euro as their official currency. Eurozone monetary policies, banking, and interest rates are controlled by a European Central Bank; much like our Federal Reserve. As for the rest, fiscal policy, such as taxing, and financial governing, are handled on a country-by-country basis.

The Eurozone is guilty of the same thing 98% of Americans do every year. They spent more then they take in. They maxed out their credit cards (loans from other countries), and they kept borrowing to keep up with the Joneses (other countries). Not only that, they spoiled their children (citizens) by giving them stuff and putting it on the credit card.

Now, it’s the end of the month and not enough has come in to pay the bills and give the kids everything they want. So what’s the easiest way out of this mess for these countries? Simple, they elect people who promise to continue to give them free stuff. I guess we are better teachers than I realized because that’s exactly what we do in the United States. We are indeed united in our desire to get free stuff from regardless of the consequences and whomever it hurts.

Let’s Check Our Crystal Ball For The Best And The Worst

Worst case: Greece goes bankrupt and takes Italy or Spain with it. The European Union abandons the Euro, making most of the European countries currency worthless, because there is no economy to back it up. Euro banks collapse and everyone pulls their money out. World financial meltdown. No one in his or her right mind would ever allow that to happen.

Best Case: Tough love. The leadership of these countries will need to impress on their citizens that the free ride is over for a time. Promises were made when times were good that can no longer be sustained. More bailouts are probably on the horizon. Yes, that nasty word we all hate. Giving more money to people, who didn’t handle it responsibly in the first place, doesn’t go down well with the rank and file worker in any country. Ireland, Portugal and Greece have already received bailouts from both the International Monetary Fund and the European Central Bank. Germany is the big dog in the meat house over there and many are expecting them to foot the bill for a lot of this mess. German citizens aren’t taking that too well. Sound familiar?

Thankfully we are not on the hook for any more bailout money, although the European Union seems to have no problem pointing the finger at the U.S., for starting this mess. And, to a certain extent they are probably right. We may not live in a totally glass house — but it sure has a lot of windows.

Some Final Thoughts

If Greece were like the U.S., Timothy Geithner could run down to the basement and crank up the printing presses. But Greece is on the Euro. They don’t have their own currency and that is part of their problem.

It would be pretty hard to argue that the United States is not heading down the same road as Greece, Portugal, Spain or Ireland. As the old Fram Oil Filter commercial used to say, “You can pay me now, or pay me later.”

The gist of that commercial was personal responsibility. When someone gets something, it had to come from someone or somewhere else. But the main point remains that same. Sooner or later someone is presented with a bill for services or products rendered. Right now that bill is due in Greece and they can’t pay it. And soon it will be presented to the American Taxpayer — in case you’ve forgotten, that’s you.