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The United States is forecasted to narrowly escape an economic recession in the first two fiscal quarters of 2008. That is to day, according to economic estimates, the total value of goods an services produced by the United States during 2008, i.e. gross domestic product or GDP will only be 1.8% (www.theeconomist.com) Since a recession is three fiscal quarters of negative GDP growth the U.S. is also predicted to narrowly escape a recession in 2008 with quarterly growth estimates for the first half of 2008 being in the 40-60 basis point range.

What many are considering the cause of the economic slowdown is the credit crunch within financial markets believed to have been caused by the sub prime mortgage markets. While a great volume of securitizations worldwide include sub prime mortgages in their derivative natures and calculations, the fact of the matter is the financial markets are much more than derivative financial instruments based on
a minority fraction of U.S. mortgages. In other words, the cause of the U.S. economic slowdown is being disproportionately blamed on the bursting of the housing bubble.

While it is true consumer confidence has been negatively influenced by the credit crunch, and greater restrictions on mortgage lending standards, a part of that lowered confidence has been due to the sensationalizing of the sub prime problems as the one and only scapegoat for an economic slowdown. This is clearly not the case as the following paragraphs will illustrate.

The Other Scapegoats:

The U.S. auto industry was the last scapegoat but didn't get as much attention as the new sub prime scapegoat because the timing was wrong i.e. the U.S. was coming out of a recession and entering a period of economic growth when the U.S. Auto industry didn't come out of the slump. As a matter of fact it still hasn't, General Motors and Ford are still managing huge liabilities on their balance sheets in an increasingly competitive auto manufacturing environment and with higher fuel costs to boot. This tough time will be overcome but has made Michigan one of the most economically deprived States within the Union.

Another two scapegoat that haven't gotten quite as much attention as the sub prime goat are inflation and GOP fiscal policy. Inflation is caused in part by the availability of too much liquid capital within the economy which lowers the purchasing price of currency but is also caused from rising cost of living due to increased transportation and product costs. When wages

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