Coming into the year, the unemployment level in the U.S. was one of the most worrisome topics from coast to coast. Now we're leaving the year, and it still is.

The official unemployment rate, as measured by the federal government's Department of Labor, remains stubbornly stuck close to the double-digit mark. Despite continuing efforts from Washington to stabilize the economy and convince businesses that better days are on the horizon, joblessness has averaged between 9.5 and 9.7 percent.

A broader measure -- which includes workers employed only part time but who want full-time jobs, as well as those who have given up on getting hired -- paints an even bleaker picture. When these workers are counted, the full unemployment and underemployment rate reached a high of 17.5 percent.

The National Bureau of Economic Research says that the recession -- which started in December 2007 and to which we've grown accustomed -- has ended. In June 2009, to be precise. Ordinary Americans, by and large, aren't buying it. The wounds from the downturn are still fresh, if not getting worse in some areas, while the fear that the next paycheck could be the last one is rampant and not wholly unfounded.

The good news is that the situation is showing signs of improvement, as demonstrated by a recent government report indicating upbeat job growth in October. Still, we find ourselves in something of a stalemate, and we need more evidence of a sustained turnaround. Businesses don't want to hire until they're confident the economy is on the mend, but Americans are afraid to spend on nonessential goods and services for fear of racking up debt just before losing their livelihoods. Consumer spending is responsible for a large percentage of the nation's economic activity, and until it picks up, businesses aren't likely to see the recovery they want. But how can it with so many of us worried about job safety and, therefore, scared to part with our cash?

Everywhere you look, the numbers are humbling. First-time claims for unemployment insurance, reported weekly, generally have been above 400,000 throughout 2010. Nearly 9 million people were getting jobless benefits as of mid-October, although the four-week average for claims fell to their lowest since December 2008. An emergency benefits program to cover the long-term unemployed -- in extreme cases stretching more than 99 weeks -- has been extended by Congress several times and may be again. For many, who tracked "unemployment extension 2010"  in online searches, those benefits are all that's keeping them from homelessness and hunger, and we can't know with any certainty how long the government's help will last.

Earlier this year, Washington found itself in a different position to help the jobless, thanks to the Census Bureau. Americans in need of work or a second income scrambled to join the agency when it needed to fill 1.2 million part-time roles for its once-a-decade demographic survey. For those who got the positions, it meant a few crucial months of steady work. But when the census ended, so did the jobs -- and the temporary boost those jobs gave to the employment statistics.

Despite the gloom, it's important to remember that there are bright spots, and October may be remembered as the month the labor market emerged from the doldrums. Private-sector hiring has been improving throughout the year, although the gains have ample room for growth.

With the midterm elections out of the way and the government continuing to try to right the ship, we'll see if 2011 will mean the return of real, if slim, hope in the jobs arena.

--Chris Nichols

Wall Street: a location that conjures up images of wealth and imagination, along with notions of endless possibilities and the American dream. More recently, it has been seen as a pit of spite and greed overrun by win-at-all-costs robbers wearing $5,000 custom suits.

The truth is probably somewhere in the middle, but the bankers and traders who occupy the Wall Street sphere, which extends well beyond the intersection of Nassau and Broad in lower Manhattan, have certainly done their fair share to deserve the latter characterization.

For many people, everything that's gone wrong with high finance's way of doing business can be symbolized by one firm: Goldman Sachs. What was once a revered investment bank, respected for its philosophy and renowned for the acumen of its employees, is now public enemy No. 1. And the feds are finally closing in: The U.S. Securities and Exchange Commission settled with Goldman in July for $550 million, but filed a new fraud claim four months later against its trader and poster boy Fabrice Tourre.

Two years ago, most people knew little about Goldman, if they'd heard of it at all. Why should a farmer in Nebraska care about an investment bank in New York, and what is an investment bank, anyway? Similarly, if you weren't insured by AIG, or if you didn't have a mortgage originated by Countrywide, you probably wouldn't have given those firms much thought. How quickly things can change.

All you need is a meltdown of the financial system that leaves power and wealth in the hands of a privileged few, some multimillion-dollar bonuses, haughty executive dismissals of pointed questions, gleeful emails talking about "poor little subprime borrowers [who] will not last so long," and descriptions of "a great vampire squid wrapped around the face of humanity," and you have the formula for a change of public opinion about Wall Street. More simply: I didn't know you before, but I really dislike you now.

The primary goal of Wall Street is to make money -- not a new notion. But the financial crisis has led to Americans re-evaluating the tactics used to get that money. We wonder how it is that someone needs to make $50 million a year. We might not begrudge anyone that; we just hope they're doing something really useful with it, like curing cancer or founding literacy centers. But when we find out the financiers are basically moving pieces of paper around, or are making bets on "stuff," some of which they have never and will never actually own, and some of which exists only as a concept and not in the real world -- then we start thinking that's a little strange (and watch indignant documentaries on the topic).

And Goldman's not the only target of public outrage. There's AIG's repeat bonus round in April, or Countrywide's cover-ups — which cost its CEO Angelo Mozilo $67.5 million in fines and reparations in an October SEC settlement. The anger extends to the likes of Citigroup, Fannie Mae, Freddie Mac, Merrill Lynch, and their ilk, firms that received billions of dollars of taxpayer-funded bailouts to stay alive or that were scooped up in fortuitous mergers, with the federal government's stamp of approval. Some of the companies were too big to fail, a rather duplicitous phrase that means if they were to vanish, the entire economy could suffer mightily. Average Americans didn't create the mess, but they're sure having to clean it up.

In 2010, a serious push was made to level the playing field, to reset the accepted way things were done, and to keep the public from again getting on the hook for Wall Street's excesses. The centerpiece was the Dodd-Frank Wall Street Reform and Consumer Protection Act. In short, the measure was meant to protect consumers, ensure another financial collapse didn't occur, impose stricter rules on certain securities, render bailouts unnecessary, and stop firms from getting so large that they are virtually single-handedly responsible for the health of the economy. While the goals are far-reaching, Dodd-Frank hasn't resolved everything, including questions about compensation.

Meanwhile, the Feds, reportedly planning on insider trading arrests before the New Year, has raided hedge-fund offices. The SEC, on a roll, is investigating JPMorgan and Citigroup on yet another improper collateralized debt obligation.

Heads may roll, but they've rolled before. Wall Streeters always find means to get their money. They adapt. Laws through the years and unforeseen crises have shown that again and again.

But this time, we're not playing their game anymore: We've pulled $60 billion out of the stock market in 2010. And just maybe, we're making it a bit harder to create another wreck.

--Chris Nichols

Product recalls are hardly new, but they're on the rise -- thanks to increased industry sensitivity and improved testing. The White House, as part of its 21st-century mission to unite bureaucracy and technology, consolidated recall news from several regulatory agencies in 2010 -- and created an app devoted to product recalls.

The call-backs in 2010 were notable because of the companies and products involved, and in some cases the sheer scale. One of the standouts was Toyota, the Japan-based car maker. From late 2009 and throughout 2010, the company, long known for its quality, recalled roughly 14 million vehicles in its model line for a variety of mechanical issues. Whether Toyota can restore its reputation remains to be seen, but the recalls have weighed heavily on its image.

Johnson & Johnson shut down a plant after multiple recalls, including for Tylenol, Benadryl, and Children's Tylenol.

And there's no forgetting this summer, when hundreds of millions of eggs from Iowa's Wright County Egg and Hillendale Farms were taken off store shelves owing to worries about salmonella. (Inspectors found live critters and 8-foot-high piles of manure on site.) In case anyone did forget, a November recall of Ohio Fresh eggs prodded people's memory — especially since the same owners of the tainted Iowa farms were involved.

Another prominent recall involved Graco Children's Products, which pulled around 2 million strollers from the marketplace amid fears they could lead to infants becoming entangled or even strangled. Graco and the Consumer Product Safety Commission (CPSC) disclosed that four cases of infant strangulation had taken place in recent years.

Other cases included Similac baby formula, McDonald promotional Shrek glasses, an automobile recall by Nissan, Lowe's blinds, St. Jude Medical's surgical device removal.

In their defense, many of the companies involved in recent recalls have shown admirable contrition. Toyota, for instance, went to great lengths in 2010 to admit it had made mistakes, to acknowledge how serious those errors were, and to promise to get them fixed.

The U.S. Department of Agriculture, the Food and Drug Administration, and the CPSC are at the heart of this nation's efforts to ensure product safety and quality. But it's a monumental task: Inspecting every manufactured product Americans buy is clearly impossible, and employees of the various agencies are only human.

Six agencies with various powers have combined their efforts to update the public on product announcements at Recalls.gov. Still, it's worth repeating that the system isn't perfect. The FDA and Johnson & Johnson were called out this year by a House of Representatives committee that described their dealings as "too cozy."

--Chris Nichols

Not that long ago, if you heard "California," "Nevada," "Florida," or "Arizona," you might think of fun in the sun. Now, you'd be just as likely to recognize them as the epicenters of the foreclosure crisis.

Once retirement havens or places where people built a second or third home, the states have in a few short years become the leaders in lost homes, numbering in the hundreds of thousands.

Remember 2005 and 2006? People you knew traded homes like they were baseball cards, and without much more difficulty. Why not? The house you just bought for $200,000 in April might be sold for $300,000 in September. It was so easy. If you weren't in real estate, you were missing the easy money.

Then it all stopped. Just like that. The credit crunch and mortgage-market collapse of 2008 turned what had been an astonishingly vibrant housing market into a wasteland of ruined credit, plunging home values, missed payments, bank seizures, and revelations of questionable loans by the truckload. In 2010 we're two years removed from the beginning of the housing meltdown, but we still appear to be far from what anyone could reasonably consider stability.

RealtyTrac, which monitors foreclosures, said in October that foreclosure filings were reported on 930,437 properties in the third quarter. That was up almost 4 percent from the prior quarter, but on the plus side it was a 1 percent decrease from the same quarter in 2009.

All told, the number equates to 1 out of every 139 housing units in the country. And in September, bank repossessions exceeded 100,000 for the first time in any month ever.

In 2009 a record 2.8 million mortgaged properties got foreclosure notices, a 21 percent increase from 2008 and more than double the year before, RealtyTrac said. If 2010 ends up not quite as bad, it might have something to do with a peculiar but fleeting respite: Bank of America, JPMorgan Chase, and other big lenders temporarily put thousands of foreclosures on hold in order to examine potentially faulty paperwork brought on by what came to be known as "robo-signing."

The expectation, though, is that once the probes of foreclosure practices finish, the pace will pick up where it left off. For homeowners at risk of foreclosure, there are some options to keep their house -- nearly 150,000 households sought modifications in September alone, through private venues and a Treasury Department program called HAMP. More than 1 million modifications have been made since the year began.

At the moment this dire situation is the norm for housing. Eventually the crisis will abate. But as long as unemployment remains high and the economy remains sluggish, this is the reality: hundreds of thousands of foreclosures, every month, across the country. That was the case in 2009, and unfortunately, it repeated in 2010.

--Chris Nichols

Other related Yahoo! stories:

• Housing markets that will be the strongest by 2014

• Six reasons why the housing market hasn't recovered

• 10 best cities for the next decade

Before President Obama even took office, one of his main promises involved remaking health care in America, giving those without medical insurance the ability to get it at affordable rates, and creating a program that would ensure coverage across the nation.

After a bruising and contentious fight that invigorated supporters of the overhaul and enraged detractors, Congress finally passed a measure in March. Before it did, though, the health care drama turned into one of the most divisive political issues of the modern era. The lengthy bill was hailed as a victory for those without insurance and as government intrusion by opponents.

But is the matter settled? A number of Republicans and especially tea party adherents, energized by their success on the campaign trail in 2010, have said that overturning the bill (or at least part of it) is high on their agenda. If they don't get the legislation -- expected to cost around $900 billion over 10 years -- erased or significantly watered down, you can expect the issue to make another appearance in the run-up to the 2012 elections.

The GOP might not have swayed families unable to pay medical bills with its arguments about the law chipping away at American freedoms. But it found plenty of friends in the business world, as companies large and small feared that the costs of complying with the health care rules would be overwhelming.

Will companies be able to afford coverage for their workers or be run out of business? Will profits evaporate? What will the bill mean for large health insurers such as Aetna and Cigna, or hospital owners such as Tenet? We may not know for years -- or ever, if the health law in its current form gets torn up.

Still, not everyone is guaranteed coverage, and some companies have received a government waiver on coverage minimums. President Obama isn't going to just walk away, though; he says that the law was "the right thing to do." However, he has now indicated he would be willing to consider certain changes.

What's assured is that the debate will begin anew, now that the Republicans have taken control of the House of Representatives and have narrowed their deficit in the Senate. If the first round were an indication of the next, Congress should prepare for fireworks.

--Chris Nichols

It calls for smaller government. It wants to take America back. Its members oppose President Obama's health care legislation. It fears fascists and socialists and sees opponents in the Republican Party, the Democratic Party, and everywhere in between. It wants to end the Federal Reserve, to balance the budget, and to ensure that the U.S. is the leading nation in the world. It has powerful supporters, if not leaders, in Sarah Palin and Glenn Beck.

Meet the tea party of 2010. But don't mistake the above as a uniform description of the party's platform: This grassroots, decentralized group of Americans is sometimes contradictory, often feisty, and always flummoxing to the politicians it wants to oust. However, the tea party's followers have found common cause in at least one thing: outrage -- outrage at an array of topics, from government spending to social mores. Ultimately, the party members insist that the U.S. is on the wrong track, and believe they're the ones to lead the country in the right direction again.

Opponents say they've got it wrong. In the tea party, they see sinister signs and the kind of anger that arises when people attack others based on their beliefs, their religion, their race, their lifestyles. The tea party, they fear, represents an America in which equality is only for the rich, for those who trace their ancestors to Western Europe, and for those who worship the proper way. Even if the movement were only about fiscal responsibility, opponents worry, its ideas of economics would wreck the country.

The tea party adherents say they represent us. Those against the party hope that isn't so. The truth of the tea party is complex, and its motives remain debatable. What isn't in question is that in less than two years, this loose aggregation has shaken American politics in a way most of us have never seen -- and we are obsessed. And at a time when Wall Street and Washington are more interconnected than ever, investors can't afford to ignore the tea party's rapid rise to prominence.

After all, it was on the leading business news channel, CNBC, that the groundwork for the tea party was laid -- although the man responsible couldn't have known at the time just what he had started. In February 2009, on-air editor Rick Santelli, in the midst of an angry critique of government aid for some homeowners, uttered the phrase that seemed to begin it all: "We're thinking of having a Chicago tea party in July. All you capitalists that want to show up to Lake Michigan, I'm going to start organizing."

Now, a mere 21 months later, politicians running as Republicans but holding themselves up as unabashed champions of the tea party, have found their way to the U.S. Senate, the House of Representatives, and state governor mansions. Rand Paul of Kentucky and Marco Rubio of Florida are two of the more prominent, and they're preparing for six-year terms in Washington. In Nevada, Sharron Angle nearly beat Senate Majority Leader Harry Reid, while in Alaska Lisa Murkowski lost in the GOP primary to tea party insurgent Joe Miller.

However, it hasn't been all smooth sailing for this new collective. Christine O'Donnell failed to win the Senate seat in Delaware, and Murkowski stormed back in the general election as a write-in candidate.

What does the tea party mean for Wall Street? In the world of business and on trading floors, support tends to flow to candidates who support less government regulation and lower taxes. Everything else is secondary. If the tea party does succeed in limiting government, it can likely count on future support not just from Santelli's post in Chicago, but also in lower Manhattan.

--Chris Nichols

If the financial crisis and recession of the past couple of years have taught us anything, it's that we're all in this together.

You or a family member lost a job. College has become too expensive. Credit card debt is never-ending. Foreclosure is a legitimate threat. Plenty of people would admit that some financial wounds have been self-inflicted: We borrowed too much, too fast, and believed that home prices would rise forever.

There's another part of the story, though, the part that can't be blamed on regular people: exotic unregulated securities, unfair lending practices, and service fees that border on usury, for example. The degree to which negligence, malfeasance, and questionable business practices led to the downturn is impossible to pinpoint. That those factors contributed isn't in question, and that's where the need for consumer protection comes in.

That may explain the reassuring appeal of 61-year-old Harvard law professor named Elizabeth Warren. Lawmakers in Washington have responded by passing legislation and creating agencies with the intent of guaranteeing ordinary Americans a fair shake in the economy. Warren is one of the key players in the new order.

She's a member of SmartMoney's Power 30, and Time named her one of the Sheriffs of Wall Street. Warren has been a familiar folksy face (and voice) on talk shows, able to pinpoint the most baffling financial chicanery and put panic in perspective. Little wonder she inspired a rap tribute. Media accolades aside, she's got a job to do, and it's a big one. For the past two years, she has been front and center in the effort to prevent another breakdown from occurring now and in the future.

We started getting to know long-term consumer advocate Warren in November 2008, when she was chosen to lead a congressional oversight panel that was administering the bank bailout. In September of this year, President Obama named her special adviser to the Consumer Financial Protection Bureau (CFPB), a new agency meant to keep regular folks from losing control of their financial situations.

She's admitted that she's enthusiastic about the post, but the Oklahoma-born, ex-Sunday schoolteacher seems well aware that the task before her is gargantuan. She noted at the time of her appointment: "If the CFPB can succeed at leveling the playing field, we can go a long way toward repairing a gaping hole in the budgets of millions of families. But nobody has ever thought or argued that the consumer bureau can fix everything. Lost jobs, stagnant incomes, rising costs for college, dwindling retirement savings -- there's a lot of work to be done."

You have to start somewhere, and based on Warren's experience of the past two years, she has the hallmarks of a strong choice, even if she's not a perfect one.

Her team is coming together, and bankers and lenders are monitoring the developments. The rest of us should be, too. That might be your money being saved, after all.

--Chris Nichols

Credit card debt has become as American as apple pie and baseball -- the big difference being that no one likes it.

That hasn't stopped us, as a nation, from piling up billions of dollars of debt. Once upon a time, the credit card was viewed almost exclusively as a means to finance a needed purchase, which would be diligently paid off over time, with interest. But with widespread credit growth through the second half of the 20th century, with millions upon millions of cards issued, credit cards transformed into something very different.

Charge cards, for too many Americans, became a primary method of paying for everything, from a new TV to a cup of coffee. No purchase was too big or too small. Don't have cash? That's what MasterCard and Visa are for.

Here are some numbers for perspective: Data released by the Federal Reserve earlier this year, and generously bundled by CreditCards.com, showed that consumers across the nation held nearly 610 million credit cards. The total amount of revolving debt in the U.S., almost all of which was on credit cards, was $852.6 billion. (For more eye-popping figures, check out some of the numbers and prepare to shake your head in disbelief.)

Needless to say, that's a lot of borrowing on plastic. All was well until it wasn't, not unlike the situations with unemployment, collapsed home prices, and the failures of dozens of poorly capitalized banks. Thousands of us have now learned the hard way just how much of a burden credit card debt can be when things get tight. For years lenders had all the power, and again, it wasn't really a major concern -- they loaned the money; we spent it -- until the near collapse of the U.S. financial system in September 2008 shed an extremely bright light on our nation's bad habits.

We realized too late that we had a serious problem, and consumer debt was no small part of it. Debt holders panicked: How can we pay it back? Lenders panicked: Will we be paid back? Suddenly that cozy relationship between the money granters and the grantees soured badly. Legislators in Washington knew a crisis was at hand and something needed to be done to avert it. The solution they came up with was the Credit Card Accountability, Responsibility, and Disclosure Act of 2009.

In general, the CARD Act was meant to protect consumers from a range of penalties and abrupt changes in interest rates. While part of the measure went into effect last year, the majority of its components fell into place in February 2010.

For the most part, the act has been welcomed by consumer advocates, but it's far from a permanent refuge for borrowers who don't want to pay. Lenders have some clearly spelled-out rights, and it's worth remembering that "responsibility" is in the act's name, and it applies to both sides of the credit equation.

Let's face it: We all bear some blame, both the customers who borrowed too heavily and the banks who handed out cards too readily. With the CARD Act, your lender won't be able to kick you to the curb without some work, but you won't be able to open a shiny new $10,000 credit line without earning the privilege.

That's the simple beauty of the law. Accountability, responsibility, fairness, and honesty matter. With credit cards, we didn't seem to be able to figure that out on our own. Now there's a law to keep us all straight.

--Chris Nichols

On the morning of May 6, 2010, the financial world had its eyes on Greece. Trouble was brewing in the land of the Acropolis amid fears that a national debt crisis was at hand, one that had the power to spread to the European Union and beyond.

To stabilize the situation and to allay the concerns of outside observers, in particular creditors, Greece's government was contemplating austerity measures. Markets around the globe were waiting anxiously for the fix that would make it all go away.

The people of Greece, though, wanted none of it. And so, armed with their anger and led into battle by the omnipresent Kanellos the Greek Protest Dog, they took to the streets. Chaos ensued. New worries spawned.

What did the angst in Athens mean for the rest of us? Would Greece's debt woes really spread? Could contagion, the buzzword of the times, be looming? In modern finance, a problem that starts one day as someone else's halfway around the world can be yours the next day.

This thought occupied the smartest minds on Wall Street and on trading desks around the globe on May 6. Stocks in the U.S. were briefly higher that morning, but uncertainty was evident from the outset. The market began to weaken, and it continued falling steadily. By the afternoon, it was obvious that the jitters were too much, and sellers would win the day. The only question was how bad it would be.

Just after 2 p.m. ET, the Dow Jones Industrial Average was showing a loss of 170 points -- not good but far from a disaster. A half-hour later, it was down almost 300. Meanwhile, news outlets dutifully covered Greece. Greece was the cause. Commentators discussed contagion at length. Kanellos roamed the streets with abandon.

Then something happened. The Dow and other averages began to drop and quickly. For the industrial average, it wasn't by 25 points or 50 or even 100. It was a free fall. Head-scratching in New York, then panic. We had a problem all right, and it wasn't a Hellenic one: It was the flash crash.

By about 2:45, the Dow was a whopping 665 points below its prior day's close, and the selloff wasn't finished. Seconds later, the Dow was more than 800 points down. A minute after that, the loss was a staggering 998.50 points -- more than 9% of the index's total value and the single-largest point decline in the 104 years of its existence. Shares were cratering across the board. Apple was plunging. Some stocks, including Accenture's, registered as selling for 1 cent.

Suddenly, a reversal began, and the Dow erased more than 300 points of its deficit in roughly 60 seconds. By 3 p.m., the shocking damage from the previous 30 minutes had largely been undone. At the end of it all, the industrials finished lower by about 340 points, meaning they recovered 600 points in an hour. (The Wall Street Journal offered an outstanding account of the events of that afternoon, along with an interactive graphic that formed the basis for this retelling and that provides much greater detail. See "Legacy of the 'Flash Crash': Enduring Worries of Repeat.")

What on earth happened? Speculation initially centered on the possibility that a mistyped trade entry may have sparked uncontrolled selling by computer programs, but that theory was discounted quickly.

After months of careful review, regulators assigned considerable blame for the selloff to the trading of one firm, which they didn't name but which is believed to be Waddell & Reed. However, subsequent private analyses have cast doubts on that conclusion.

In other words, the right answer might never be found, or at least not agreed upon. What isn't up for debate is that orders for thousands of shares traded in the flash crash were canceled, new rules to prevent outsized and unchecked moves were enacted, regular investors were given another reason to wonder if they could trust the stock market, and the events of that day will be written about in financial history books.

Could it happen again? Never rule anything out. On Wall Street, as with everything else, history has a way of repeating itself.

--Chris Nichols

The credit crisis that swept through the banking world in 2008 may have started on American shores, but it quickly found its way to all corners of the globe, sending tremors through economies that thought themselves impervious to shock.

We know the U.S. wasn't. Neither was Europe. In truth, they hadn't been shockproof for some time, if ever, but we continued showing an impressive ability to convince ourselves otherwise in the absence of a crisis to correct us.

In 2010, the need to deal with flagging economies took on new urgency. What multiple governments have learned in the past two years is that a crisis can arrive suddenly, and when it does, it can be extremely difficult to overcome. There were repeated attempts to prevent Europe's most advanced nations from suffering severe slowdowns, as those countries borrowed against the future and bet that time was an ally, but in 2010 the bill came due.

Overburdened pension plans, difficulties making timely debt payments, and struggles to keep supplying long-standing services to the people forced leaders and legislatures from the most developed, Western-style capitalist economies into serious re-evaluations of their spending habits.

Ultimately, the situation boiled down to one word: austerity.

A serious description for serious times. Spain, Greece, England, Germany, and France were among the nations imposing new measures to keep their budgets in check through austerity programs. Sometimes, though, those responses brought an entirely new set of problems.

In Greece in May, protesters took to the streets after the government said it would cut spending to address a debt crisis. And in France in October the masses marched after a proposal to raise the retirement age to 62 from 60.

Seeing live televised footage of revolt on display is troubling, to say the least, as it inevitably leads to the question of whether modern, supposedly civilized societies could truly see their economies collapse and their governments crumble. However unlikely that outcome may be, what comes to mind when you see rioting, bonfires, and looting? Remember, we're not talking about the 18th century: This is the modern day.

If Europe didn't already have enough to worry about, in November Ireland made its own austerity proposal, after its financial system teetered on the edge of collapse and threatened to destabilize the European Union.

Fortunately, the U.S. hasn't gotten to the point of violent protests over proposed government cutbacks. But it has certainly seen its share of anger, though in contrast to Europe, not because of austerity but the lack of it. Hence the inroads made by the tea party in the midterm elections.

Axel Merk, president of Merk Mutual Funds, is on the side of those who believe that Europe's approach to rein in government expenditures is the proper one, while Washington is failing to take the needed steps.

"In the Euro zone there's a sense of urgency and problems are being addressed. We see austerity measures being implemented ... and market forces imposing discipline," he says. "In the U.S. we have quantitative easing; we bail everybody out, and we don't engage in any reform."

A new Congress might finally settle on a direction. But until then, the debate will rage on about what to do next: spend or pull back.

"We can't afford not to have a stimulus," says Columbia Professor and Nobel Prize winner Joseph Stiglitz. "You have to spend it well, [but] the right kind actually improves our national balance sheet."

Not so fast, says Peter Orszag, former White House budget director. "It's unlikely additional stimulus will reduce the deficit," he says. "It's not free."

--Chris Nichols