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In the fall of 2008, European politicians were pointing to the bad finance in America as putting the entire world at risk financially.  In May, 2010,  however, the E.U. had its own financial crisis and bailout. The added problem in arriving at a coordinated response given the relative power held by the state governments meant that the debt crisis in the E.U. could have been the contagion more likely to spread.  Whereas in the U.S., the U.S. Government’s treasury secretary and the Federal Reserve Chairman orchastrated the bailout at a dizzying pace, the more balanced federalism of the E.U. meant that the leaders of the state governments were the active players. In other words, even though the E.U. evinces a more balanced division of power between the union and state governments than is is the case in the decentralized-consolidated modern incarnation of American "federalism," the ability of the Europeans to tackle the problem of several of its states hemmoraging in public debt attests to the messiness that is inherent in a well-balanced federal system.  Even so, the consolidated condition of American government meant that states in trouble such as Florida, Illinois and California had to fend for themselves because neither the U.S. Government nor the Federal Reserve was under pressure to come to their aid. The Federal Reserve, for example, had printing hundreds of billions of dollars to assuage the U.S. Government's growing appetite for debt. However, when U.S. Senators asked Chairman Bernanke about doing likewise for the trouble state governments, he replied that the Fed was not autorized to do it. This asymmetry itself pushes the system even closer to the consolidated end of the political spectrum. As some of the U.S. Constitutional Convention delegates warned in 1787 even when the U.S. consisted of just thirteen republics, it is difficult for a central government to have sufficient energy throughout an empire-scale "extended republic."  The E.U. following its first fifty years was better able to cover the inherent diversity there, yet not yet sufficient to support its unified aims (such as a common currency backed up by coordinated fiscal policy).

In short, the financial problems that occasioned the huge financial bailouts is hardly an American quagmire.  Just as the E.U. and U.S. have different divisions of power in their applications of modern federalism, the processes and solutions themselves must undoubtedly differ as well. In the end, hard choices irrespective of the federal systems involved will need to be made at the expense of instant gratification in order for a sustainable (i.e., real) fiscal trajectory in the West to be realized.  The struggle is perhaps against expediency in a time of apparent plenty.