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I've read through the comments; my take on the question is a little different.
The original poster seems to think that the economy isn't bad because his local economy, from his limited experience, appears to be doing well.
Well, the economy as a WHOLE is doing poorly. The indicators for this are inflation increasing at a high rate...resulting in lowered real wages. Furthermore, GDP growth is decreasing to low levels.
Inflation + small GDP growth = Stagflation.
I can't be arsed at the moment to look up sources for these indicators, but google, as always, is your friend, and now you have an idea of what those economists are talking about.
Also, you seem to think that the sub-prime loan issue only has an effect on people who bought houses they couldn't afford. Not quite true, those Mortgages are used as collateral by banks and the huge hit the credit markets have taken by the collapse has caused them to be more wary of giving out loans which will further slow growth.
My personal take is that the reliance of modern economy on Credit issuance is THE primary cause of the cyclical nature of our economy. I'd prefer that we'd have a more stable system, but that's not likely to happen any time soon.
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