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UStwo, first of all let me say that it's a bummer that you asked a legit question and you got a lot of political puffery for an answer. I'm no expert, but I'll take a shot.
Banks and institutional investors are suddenly facing giant losses. They money they thought they had is simply not there. They had a lot of capital in very safe sounding, very complicated, very sketchy real estate deals.
These banks are the ones who loan money and grease the wheels of capitalism. With less money to lend, and more fear about lending it, credit tightens. Businesses suffer. Employees lose jobs and buying power. The cycle feeds on itself.
Also, the cost of fuel is affecting nearly every aspect of the economy. Simply put, it costs more to make stuff and move stuff. That money has to go somewhere, and it is concentrated in a very narrow part of the economy - energy companies. So when you buy a widget, it costs more, the widget maker probably makes less (because he doesn't pass on all his increase to you). The money goes to a hand full of energy companies, who are investing the money in the economies of a other nations as they grow their business abroad.
Further, the country, as a whole spends more than it makes. We send $$ out of the country to import things that lose value. Given the the shrinking value of the dollar, we are emptying our nation of wealth at an accelerated pace.
From where I sit, things don't look great. At my former job, our small company fired 100% of the employees in December. My wife works for a large, healthy company, and they are shedding hundreds of US jobs.
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Ass, gas or grass. Nobody rides for free.
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