I thought I was in a kind of financial time warp. A few weeks ago I read a headline on Bloomberg Finance that read something to the effect of “Riots in Greece Spark Global Selloff.” For a moment I thought I was back in May of 2010 when Greece first announced a $50 billion budget shortfall (caused mainly by massive debts cleverly hidden from the rest of the European Union with the help of American investment banks). The riots started when the Greek government announced plans to bridge their shortfall by cutting the wages of public employees, including lawyers, teachers, and physicians, among others.

After discovering that the budget cuts of last year were far too small, the Greek government recently announced severe austerity measures that will put further pressure on public workers. In addition, their EU brethren who will be required to offer a sizable financial rescue package in the hopes finally getting the Greek national budget balanced.

One way or another, Greek’s massive debts must either be repaid or there will be a default (with catastrophic outcomes for the eurpoean banks and the global economy). Just as with any other country (including other EU economies on the brink such as Spain, Ireland and Portugal), when public debts become too big to handle, default can only be avoided through three possible strategies: 1) grow your way out of it, 2) cut your way out of it, or 3) tax your way out of it. Of course, the preferred way is the first way: grow your way out of it. Stimulated economic growth creates more tax revenues without actually raising taxes, but has a killer downside: you have to keep stimulating the economy or the whole thing is likely to collapse. I call this “Feed the Beast.” Imagine you have a creature on the loose that is kept at bay by feeding it. The creature gets larger every time you feed it, and thus it demands more and more “food” to keep it from turning on you. The Obama administration, like every other administration since Hoover, has preferred economic growth as the vehicle for dealing with budget shortfalls. But the irony is that bigger economies fueled by bigger debts only produce bigger problems down the road.

For three years, it has been the strategy of the United States to try to grow our economy through massive stimulus (feed the beast). But the outcomes have been less than spectacular: the $600 billion stimulus enacted last summer by the Federal Reserve did create approximately 700,000 new jobs, but the math tabulates the cost at a whopping $857,000 per job. That’s nuts! To recoup that investment would take nearly two generations of taxes on the full-time income each job would produce. This strategy clearly needs help or it will eventually turn on all of us.

Perhaps recognizing that growth alone hasn’t been enough to close our own budget shortfalls, State Governors from both parties are slahing their own budgets or passing their financial woes down to local municipalities. But if the combination of meager growth and budget cuts aren’t enough, there is only one alternative left: raise taxes.

To many, this strategy is the last step of a dance that nobody wanted to start. But it may ultimately be necessary in order to stave off our own “Grecian Formula.” Right now, the markets are in the process of repricing all financial assets in the event that Greece cannot successfully pass the drastic five-year austerity plan proposed by their leaders. The United States’ debt ceiling debate will be the next headline grabber. But the additional step of cutting budgets (including our own) will almost certainly mean slower growth ahead. Not a problem, so long as the transition is left to unfold naturally without undue and ineffective government stimulus and other intervention. We now all reside in the era of tough choices, and it will be fascinating to see the ultimate concequences of the choices we will soon make.