There is not one answer to this question. Also, with the U.S. the economys status could be different in one location than another.
Currently there are three general forces at work affecting the economy nationwide:
1. Mortgage defaults
2. Inflation
3. Job growth / quality of job growth
Even though #1 is the most prevalent now, it is not the biggest risk. #3 is the biggest risk, and #2 could severly impact all three.
Even though the idiotic government statistic rating inflation says inflation is not a problem, ask anyone who actually has to pay for things with their own money, and not money ripped from someones paycheck, and you will quickly learn that inflation has eroded most peoples spending power DRAMATICALLY.
Job quality is the biggest problem facing America. For the first time in the history of this country, our civilian sector leaders are creating more HIGH quality well paying jobs overseas than in this country. The jobs of tomorrow (according to the U.S. Labor dept) are mostly customer service positions. In other words working for stores selling crap made overseas. Or working for company's repairing crap made overseas.
This has been an issue for blue collar Americans for years, but everyone scoffed, and wrote it off as their fault for not going to college. Not so many scoffers now, that it is mainly a white collar problem.
Simply put - Low wage jobs for everyone equals less money to be spent in the economy, combined with high inflation, and credit problems = stagflation, and an economy that will drop like a rock when they all finally come together.
