Our economy is shrinking, inflation is increasing, and it looks like it's time to tighten our belts and settle down for the worst. But were the times we are leaving really so great to begin with?

For the first time since we've been paying attention to such numbers, the median family income (from 2000 to 2007) has actually decreased during a period of economic growth. Real median family income more than doubled from the late 1940s to the late ’70s. It has risen less than 25 percent in the three decades since.

According to New York Times writer David Leonhardt, "the larger point is still crucial: the modern American economy distributes the fruits of its growth to a relatively narrow slice of the population."

A responsible economy wouldn't allow this to happen. What's going wrong?

For the first time in more than five years, the average household income is declining in the U.S., reports the Financial Times.

Joseph Stiglitz, John Edwards and anti-war group MoveOn.org all blame the Iraq War for triggering a U.S. recession. While the connection is politically attractive to some, President Bush — and even some of his critics — argue that this simply isn't true.

When President Bush said last week that "spending in the war might help with jobs" and that "this economy is down because we built too many houses and the economy’s adjusting," even well-known Bush-basher Paul Krugman had to concede the point. In a blog post, he wrote, "Hate to say this, but he’s right."

Yesterday Foreign Policy took a look at who is expected to win and lose as a result of a falling dollar. You may be surprised that the United States appears on the winning list.