The Economy: Is the Sky Really Falling?

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WASHINGTON - The economy will likely continue taking center stage on the campaign trail.

Perhaps even more so after the Dow fell sharply by its second-largest point loss ever and as people from Wall Street to Main Street grow more concerned about the prospects of recession.

Click play to get Pat Robertson's analysis following CBN News Correspondent John Jessup's report.

Recession on the Horizon?

With Americans cutting back their spending, continuing problems in the housing sector and dramatic slowdowns in manufacturing and job creation, the signs are increasingly pointing to the reality of a recession.

"We definitely are putting more in our savings because you don't know what the future is going to hold," said one shopper.

Worries about the economy sent the Dow plummeting Wednesday - down 733-points as investors sold on fears of what could be the most serious recession in decades.

"We're going to see tens of thousands lose their jobs as businesses pare back their payrolls," Mark Zandi, chief economist for Moody's Economy.com, warned. "We'll see people struggling to stay in their homes, make their bills and it's going to be a really tough time for many of us."

Bernanke: No Quick Fix

Fueling more concerns about the economy, Federal Reserve Chairman Ben Bernanke warned that the credit crisis is still a "significant threat" despite the government's plan to buy shares in large banks to raise capital.

"Stabilization of the financial markets is a critical first step. But even if they stabilize as we hope they will, broader economic recovery will not happen right away," Bernanke cautioned.

That gives those concerned about recession reason to worry.

"There are two main reasons your pay falls during a recession. The first is businesses cut back on workers hours and the second is that they don't give bonuses and raises that equal the rate of inflation." New York Times business columnist David Leonhardt said.

Still, the administration's top finance officials have been working around the clock to beat the odds, aiming to restore confidence in the financial system.

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John Jessup

CBN News Washington Correspondent

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