The passage says that recently, two bad things have happened:
1) we overreached AND
2) we got a harsh reminder (of some home truths)
"Home truths" means "truths that are essential to understand, but which are discomforting or unpleasant to hear or be reminded of"
"Reach out" in this passage must mean "attempt to get to outer space" or maybe just "expand ourselves again -- follow our ambitions" (unlike the contraction of our ambitions caused by the recession)
Student or Learner