The Trojan Horse inside the world’s financial fortress is the European Union. Lurking in it are Greece, Spain, Portugal and Ireland. When they finally spring into the daylight and are seen by multinational banks and lenders, a second financial meltdown will begin.

What is the cause of the coming meltdown? Simply put, for years Greece, Spain, Portugal, and Ireland have spent more than they have earned. To do that they sold their government bonds (just as we sell our government bonds to China) promising to repay the value of those bonds, plus interest. In other words, they borrowed money to squander on socialist programs like free healthcare. Today, they are so deep in debt to foreign lenders they cannot even pay interest on their existing loans, and lenders are very reluctant to send good money after bad.

Last month, Greece tried to cut its budget in an attempt to lower its debt. Result? The Greeks are so accustomed to the gravy train delivered by their socialist government, their unions and retired workers rioted when they were told labor contracts and pension payments must be trimmed. They did not believe or care that Greece was close to bankruptcy.

Greece was able to borrow more money in March, essentially from Germany, just before their treasury ran dry. But the underlying problem, their unpaid national debt, is still growing. Right now, Greece owes lenders the equivalent of 125% of its Gross Domestic Product (GDP). That is, they are obligated to pay foreign banks and creditors a sum greater than the value of everything they make and produce in an entire year. Besides tourists and olive oil, Greece does not have much to work with.

For individuals and nations the iron rule is: Debt Must Be Repaid. Since no one lends money to a bankrupt nation, very soon Greece will announce they cannot repay their loans, the money will run out, and there will be more riots or a depression, or both. It happened to Argentina and Russia, and it will happen to Greece, Spain, Portugal, Ireland, and other European countries unless they adopt austere budgets, cut the cushy social programs, and reduce their debt. If they do that, there will be painful years for retirees and workers. If they do not do it, there will be a catastrophe and they will plunge into an economic depression.

What does this dreadful situation mean to us? Simply put, we are closely connected to a European economy that equals our own, and international lenders are freezing credit to Europe because they cannot know which banks are stuffed with worthless bonds and will fail. Second, they will lose confidence in the ability of most European nations to repay their existing loans. Ultimately, they will not provide money to any bank or government. We saw the results of that process in America last year. But this time it will be Europe’s economy that slows for lack of money. Then their production falls and unemployment rises. Then Europe cannot buy American products. Then our economy slows again, our production falls, and unemployment rises. Will we be able to borrow more money to keep it all going? Or will we just print it and drop it out of helicopters?

The Congressional Budget Office (CBO) said the trillion dollar healthcare bill would reduce the deficit. That got votes the White House wanted. But after the bill passed, the CBO changed its tune and said the budget would produce a ten-year deficit of $10 trillion. In ten years that totals a $170,000 of debt for every household in America! We look a lot like the Greeks.

Noting our growing national debt, CBO Director Elmendorf said the U.S. fiscal policy is “unsustainable to an extent that it can’t be solved through minor changes.” Federal Reserve Chairman Bernanke said the same thing. The word “unsustainable” means congress cannot continue to spend wildly or international lenders will lose confidence in America’s ability to repay our growing mountain of debt. Remember the iron rule? Debt Must Be Repaid. Even China will stop buying our bonds and the U.S. will freeze along with Europe. Then the blight will spread to Asia for the same reasons.

But wait a minute! We are not like Greece and those other socialist and bankrupt European countries, are we? Didn’t President Obama just tell us that “recovery” is underway? Sorry, no dice. Our government now spends $1.49 for every dollar it brings in. Our national debt is growing, just like Greece, and is now vastly greater than our GDP. We already owe creditors like China over three times the value of everything we can make and every service we can provide in an entire year. Three times! And our debt is growing so rapidly that soon we will be unable to pay the interest on it.

Let’s stop and think about the numbers being thrown around these days. Start with $100,000. That is a stack of $100 bills four inches high. So a million dollar stack is 40 inches tall. A billion dollars? The stack would be twice as high as the Empire State Building. Ten trillion? That stack of $100 bills would be 6,800 miles high! If you laid the stack on its side and drove past it at 60 miles per hour, it would take five days to reach the end. We are talking real money here.

But since the numbers are too huge to grasp, and the calculations too difficult understand, we must look at history instead. Let us examine the history of U.S. total debt, year by year—as a percentage of everything we produce, our GDP. The chart below is based on official figures and, as you look at it, remember the total debt of Greece today is 125% of their GDP. That level of debt is causing Greece to teeter on the edge of chaos.

See the debt America had to pay down in 1933? The Great Depression followed. See where we hit that point again in 2003? See that we are piling up debt to a level we have never seen before? And remember, no matter what the White House tells you, there is no magic, no easy way out.

Then remember the iron rule: Debt Must Be Repaid.