Downfall of the economy

The debt crisis of US caused worldwide economy downfall since last Thursday. Clicked into the KLSE sites, nearly 1,100 listed stocks in "reds" (went down in price). Ran into a trading class last month, the statistic predicted 2012/2013 will likely to be the economy downfall year. Can't believe it happened so early this year. While we think that is our little investment on stock, our belief drew us concerns that the stocks we invested in should be able to bounce back in the near future. However, what worries me is the real crisis behind it - the Inflation. This will affect many of us directly, especially we earn most of our incomes as employees. Things will getting expensive, yet income never increases. Our government still having very big gap in debt, with limited foreign investment in the past two years, money that our PM put in to attract foreign investments will surely not achievable in the next coming days. Even US is having debt crisis, caused the pull off of money from their investments, do you think these investments will come to us? They rather choose Indonesia, Vietnam or Philippine because of low labor cost and open economy system. As many experts predicted, i also believe if our government don't solve the root problem, we're not far behind the Greece and Italy. Apparently, domestic economy doesn't grow and earn for our country since our in-house buying ability is getting lesser with high inflation nowadays. Is time to spend less and save more, whatever you can.