News reports of the last couple of weeks touted the financial troubles of Greece. As their debt to GDP ratio rises to historic and worrisome levels there’s a real chance of default on sovereign debt.

While pundits opine the implications on the global economic and political landscape one can’t help but notice the similarities of Greece to California. We aren’t talking about wine or fruit production but the ramifications of a small member state’s financial troubles on the larger union to which it belongs.

The European Union maintains a bifurcated structure – member nations maintain separate political agenda while sharing a common currency and economic policy. The result is inextricably linked cross-border social (in)stability. If one nation “goes” what’s to stop the contagion from hitting a Portugal or a Spain?

EU leadership has been quick to address the issue even if short on details. The rhetoric makes clear some sort of rescue is in the works.

Halfway around the world California is in a similar predicament yet it passes somewhat quietly despite its potentially larger impact on the world.

Like Greece’s relationship to the EU California is a member state of a larger union – the USA in this case. It maintains annual budget deficits of astronomical proportions. This year alone the figure is reported to be $20 billion. Ouch!

Greece represents roughly 3% of GDP within the EU. California by comparison would be the 6th or 7th largest economy in the world if it was a standalone nation.

Who is going to bail out California? Surely they can’t help themselves. Tax rates are already high while receipts continue to plummet. Borrowing more money on top of its mountain of debt will prove challenging if not impossible as IOUs mount and credit ratings drop.

Not to fear. The EU will prop up Greece and, uh-oh, Uncle Sam will prop up California. But wait…where will the Feds come up with the necessary financing? Borrow more? Raise taxes? Print money? None of these “solutions” sound appetizing.

Greece matters because it portends the American future. If we cannot control our spending and pay down our debts we will live on borrowed time hoping for someone to bail us out. Who’s that going to be? Who could that be? Who would be willing and able to do it?

Let the puzzled silence begin…