The $1.3 trillion exposure of our banking system could turn out to be a relatively low estimate compared to actual figures. If the other shoe drops and things deteriorate, the few banks that likely hold the majority of the risk may find it difficult to weather the storm. In the age of “too big to fail,” American taxpayers may again be put in the position of bailing out our financial institutions because their government has turned a blind eye to the writing on the wall. Regrettably, American taxpayers could find themselves in the precarious position of having to again prop up American institutions, this time as a result of insolvent foreign economies. The United States must be prepared for what will happen should this crisis become worse and spread before the EU devises an appropriate course of action. Economic history has shown us that it pays to be prepared.
At home, the recent decision by Standard & Poor’s to change its outlook on U.S. debt from stable to negative, a move that has been forecasted for years, has gained the attention of the American public. Combined with the tremendous media attention over the fiscal 2011 and 2012 budget resolutions, it is becoming clear to many Americans that our spending habits have caught up to us. Soon our nation will have to tackle another momentous issue in our debt ceiling.
The severity of the U.S. economic situation is irrefutable, and we are part of a world economy whose situation is precarious at best. It is time to take a long look at the European crisis and recognize that we may not be far behind. To get our fiscal house in order we must continue to cut spending and enable our job creators and entrepreneurs to get back to the business of creating jobs. America needs to wake up and begin, in earnest, efforts to get our economy going again.
Vice President Joe Biden waits to conduct a mock swearing-in ceremony with Sen. Brian Schatz, D-Hawaii, in the Capitol's Old Senate Chamber, December 2, 2014. Schatz was sworn in to serve the remainder of his term since he was appointed to the seat after Sen. Daniel Inouye, D-Hawaii, passed away.