NEW YORK (TheStreet) -- In terms of the Greek situation, it is all politics now; economics must take a back seat. That's what happens when a debt situation gets out of control, something we have seen all too often in recent years.
The back seat, however, offers an opportunity to look back at lessons learned from this crisis -- and others like it. Here are four:
1. Debt is a contract that must be honored. Countries just cannot just keep running budget deficits and then expect them to be forgiven sometime in the future.
This is especially true in a situation like Greece where some national sovereignty is given up to join a currency union so that there is no national currency or independent monetary policy.
But, this national sovereignty is even given up, as in Venezuela, Argentina, and Brazil, where the lack of any kind of fiscal discipline is ignored with the justification that the population of the country needs to be supplied with the things it wants. Monetizing the debt and creating inflation does not work either.
Debt must be repaid or the country must suffer the consequences. And, one party, Syriza, led by Prime Minister Alexis Tsipras, can only ignore previous Greek government commitments by accepting the consequences of such a denial.
It is not sufficient to tweet about, as Tsipras just did, "The dignity of the Greek people in the face of blackmail and injustice...." The Greek government made a commitment.
2. Keynesian policies can hurt. The fundamentalist Keynesians fight against government austerity programs because they believe the government should do everything it can to put people back to work in the jobs that they formerly held.