This is a rush transcript from "Your World With Neil Cavuto," May 25, 2010. This copy may not be in its final form and may be updated.

NEIL CAVUTO, ANCHOR: All right, it is still a correction here. That means a drop of about 10 percent or so from our highs. But for countries like Portugal and Ireland and, yes, I have to say, Italy, and Spain, and Greece, they’re knee-deep in a bear market there, each down more than 20 percent from their highs.

So, is any of that coming here? Former New York Stock Exchange Chairman Dick Grasso does call it a wakeup call.

Quite a wakeup call.

RICHARD GRASSO, FORMER CHAIRMAN, NYSE: Neil, great to be with you.

CAVUTO: Good to see you.

What do you make of what’s just generally happening across the globe?

GRASSO: Well, start with the countries you just named.

What they clearly demonstrate is that debt and deficits cannot be sustained with economic growth and prosperity. And, so, Greece, which is right now center stage, and we’re hoping is the only country amongst those we have named to suffer as it has, is a wakeup call, as I have said, to the leadership in Europe, but, more importantly, to the leadership here in the United States, that we have got to get our fiscal house in order.

CAVUTO: But we don’t. They don’t.

GRASSO: Well, you know, remember something, Neil. Greece — and it’s a wonderful country with — a great place to visit, has the population of Los Angeles and the GDP of Ohio, OK? I don’t think Greece is going to bring the world economy down. However...

CAVUTO: But it is part of a greater contagion, is it?

GRASSO: However, it’s — it’s a contagion threat. And, more importantly, the temptation on the part of leadership in this country and other developed nations to pursue the same type of policies cannot continue.

CAVUTO: But those policies, basically, that just are spending more than we take in, year after year, decade after decade, and now the proverbial chickens we’re told are coming home to roost, do you buy that?

GRASSO: I do. And we’re seeing lessons here in the states, whether it’s New York State, California, New Jersey, all facing severe cutbacks in social services, massive increases in taxes. We have to have leadership that’s prepared to do what was once unthinkable, cut, if you will, a lot.

CAVUTO: But they’re not. They’re not. They’re not. They’re not.

GRASSO: Well, I think, if you look over in New Jersey, you have got a new governor who says...

CAVUTO: No, no doubt about that. Chris Christie, you’re talking about.

(CROSSTALK)

GRASSO: Right. Right. And we’re going to have a new governor here in New York in less than a year.

CAVUTO: Who are you rooting for?

GRASSO: Well, you know, my heart roots for my native countryman, OK? And, actually, I think...

CAVUTO: That would be Andrew Cuomo.

GRASSO: I think Andrew Cuomo understands the problems we have in this state. He understands that business is central to an economic recovery. I think he’s going to get it right.

CAVUTO: Well, he was coming after Eliot Spitzer, your friend, who’s apparently now a big TV star, news star. How do you feel about that?

GRASSO: Well, you know, I have watched Eliot. And that’s why I’m here today, Neil. I’m hoping that this is the beginning of my TV platform.

(LAUGHTER)

CAVUTO: So, you are going to take a pay cut to come here?

GRASSO: Believe me, I will come here pro bono, Neil, to be your commentator.

CAVUTO: Or to just stick it to him, I have a feeling.

GRASSO: No. You wouldn’t expect that of me.

CAVUTO: No, you would not be so tacky. I would be.

But, all right, Dick Grasso, thank you very much. The man is an encyclopedia on these markets, the former head of the New York Stock Exchange, who had the guts to take on Eliot Spitzer, when everyone else was folding like a cheap suit. I would have folded like a cheap suit. That’s the difference between us.

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