I am not an economist, and I don't understand what's going on right now. I know that "they" are telling me that there is a credit crisis which causes businesses not to be able to float loans to keep their businesses running. And somehow it was caused by subprime lending and financial slight of hand. Stupid business practices and ignorant people taking out mortgages they cannot afford.
What I do know is that groceries and gasoline are costing a lot more than they used to, and, as a retired person, my income isn't more than it used to be. That's my own personal little crisis. I just buy fewer things. Well, actually I did just buy a new and expensive replacement vacuum cleaner and I did just buy new and cheaper a replacement phone, but I call those things "maintenance". I canceled one of my morning papers, and I no longer buy several Starbucks coffees each week. It's all tradeoffs. So far, I'm not spending more than I take in.
Why can't the state and the country legislators spend less than they take in? We should fire them all and vote in legislators who can balance a budget, stay out of wars we can't afford, etc.!
For your viewing pleasure, here is a picture of the Dow Jones Industrial Average starting in 1932 and ending in 2008. You can click on the picture to see a bigger image. If only we had invested in the market early and left it in the market, then the current "crisis" wouldn't be so scary. I'm going to ride it out, not sell and put it all under my mattress.