One wonders why all those public employees were rioting in Greece over the past year. According to a review of Greek accounts following the first bailout, their budget deficit actually got bigger.

In other words, they missed the targets set for them by the IMF and EU. This probably means no more cash for the debt-trapped nation.

This is why an IMF economist believes the default of Greece will be messy - and could very well kick off an unprecedented series of bank failures.

The Greek government says any more steps will only deepen the recession and make things even worse. The debt trap is quite clear at this stage.

These complications triggered not only the aforementioned expectations for a hard default, according to WSJ:

"I expect a hard default definitely before March, maybe this year, and it could come with this program review," said a senior IMF economist who is keeping close tabs on the situation. "The chances for a second program are slim."

A hard default means a messy one. A default that is not controlled could have a serious domino effect: it can push banks to bankruptcy (such as French banks, that are highly leveraged), and it can send bond yields of other countries much higher.

Spanish and Italian bonds are almost at the tipping point now. With Germany and France balking at the growing cost of bailing out EU nations, one wonders what arrows the European Central Bank has left in its quiver to stem the tide and right the ship. Up until now, the central bankers have relied on those two economic powerhouses to help finance the restructuring of debt. But they can't bail out everybody, especially huge economies like Spain and Italy.

They no doubt will muddle along; printing money has proven to be popular previously. This will paper over the disaster in the short term, but no one has yet figured out how to get off this debt merry-go-round.

And when it stops, we'll all end up paying for it.