Under grimmest scenario, debt-burdened Greece, Ireland, Italy, and Spain can't pay what they owe to Eurozone banks, which then stumble, causing US banks to falter, too. But US banking system is stronger now, and regulators are more vigilant, say optimists.
Some private economists see devastating effects, such as stock markets plunging. But other economists don't envision such a scenario, suggesting that the Fed, for example, may step in.
The China economy has surpassed Japan’s to become the No. 2 economy in the world. But America doesn’t need to worry about China leaving the US in the dust anytime soon, economists say.
The chief question at this weekend's G20 summit will be how to keep the world economy growing. The Europeans are cutting government spending, ignoring President Obama's call for more stimulus.
The US put $700 billion into a bailout of US banks during the financial crisis. Now the nations of the euro zone are proposing a similar bailout fund – €750 billion – to deal with the Greek debt crisis.
The Dow average was up by more than 340 points as of early Monday afternoon. Investors were relieved to see European leaders agree on a Greece debt plan.
Europe could be in for some major belt-tightening to handle the Greek debt crisis, as well as problems in Spain, Portugal, and Ireland. That could slow US economic growth somewhat.
Stocks rallied in the US and in Europe on Tuesday on expectations of an emergency European Union bailout for Greece. But Greece, with a ballooning national debt, is not out of the woods yet.
Economic activity in the US plunged 6.1 percent in the first quarter of this year, but free-fall in consumer spending stopped.