In a move that sent shock waves across the globe, Eurozone finance ministers agreed to rescue loans for Cyprus if the government would tax (read Governmental Theft) cash from between 6.75% and 9.9% on those with money in Cyprus banks.

Part of the problem is that a country can’t attempt such a thing without its neighbors questioning the possibilities of similar behaviors from their own government. Especially if they all seem to have the same core problem which is that they can not quite get a grip on their spending.

Now the plan has been “moderated” to a graduated system of 3% for those under 100,000 euros, 10% for those with savings between 100,000 and 500,000 euros, and 15% for those with over 500,000 euros.

With Russian citizens holding a majority of the billions of euros held in Cypriot banks it is no small wonder that Russian president, Vladimir Putin, railed against the levy as “unfair, unprofessional and dangerous”.

Here in the United States, Rep. John Campbell, chairman of the House monetary policy and trade subcommittee of the House Financial Services committee, told MarketWatch that he hopes nothing like this could happen here in the U.S. and said the crisis, which includes a controversial tax on bank deposits to pay for a country bailout, underscores sentiments of those who say the U.S. needs to reign in it’s own spending.

“This is what those of us who have been so aggressive about our debt and deficit have been worried about,” Campbell declared. “Obviously Cyprus is at the extreme end of this problem. If you wind up in a debt crisis, it doesn’t matter if it is Cyprus or us, where you cannot finance your debt, there are any number of actions that a government might take at that point and they’re all bad.”

“There is no question that it is a little bit of a scary solution because of the possibility of contagion but this is what happens when you don’t get your debt situation in order,” he remarked. “My concern is that Europe has not yet dealt with the fundamentals of their problems.”

When the best Washington can do is merely reduce the rate of spending let alone the debt itself, it does not bode well for the “little people” here in the U.S. as we consider the possibilities of our own brand of governmental theft.