Kasman says -- no surprise here -- that the U.S. economy is being dragged down by the declining housing market, the credit crunch and rising oil prices. However, although this can be called a recession, it's unlike any we've seen in the past, he says. It's unique in that other parts of the global economy are staying strong and in that U.S. policymakers have responded to the drags on the economy in an unprecedented way. "Policymakers in the U.S. are on steroids right now," he says. Also, the corporate sector has remained relatively healthy. "Recessions have only happened in the past when corporates have been stressed in a significant way," he says. "They are being stressed right now, but nothing like what we've seen before."

"The economy will be in pain, but it will not fall into a black hole," Kasman says. One reason is that corporations have been cautiously reducing their plants and productivity -- essentially correcting themselves. Credit conditions, although perceived by consumers as tight, are not as bad as the last U.S. recession, and creditworthy borrowers are not being cut off. Layoffs won't be that severe: Kasman predicts that about 750,000 jobs will be lost during this downturn -- close to 100,000 jobs per month over the next six months. Another reason, which Kasman characterizes as his most controversial, is that "banks are acting as economic stabilizers," he says. "Since this crisis began last July, bank balance sheets have grown by $1 trillion."

Kasman concedes that a couple of things must happen in order for the U.S. economy not to slide into a major recession.

One, the government rebates need to provide "a stich in time." Kasman thinks that of the $15 billion in rebates being sent to U.S. taxpayers over the next six months, 70% will be put into savings. Yet that other 30% will be spent and lift the Gross Domestic Product 1.5% -- enough, he feels, to prevent a recession.

Two, over the next three months, home sales will need to stabilize. Kasdan feels this will happen because "a lot of what we've seen is the shutting down of non-conforming mortgages," he says. "The conforming space will be a driver of growth." The stability of housing starts should grow the GDP about 1%, he says.

"The U.S. economy is like Apollo 13 -- we're trying to bring it back to Earth without it crashing and burning," Kasman says. Bernard Bernanke, in the role played by Tom Hanks in the movie, will need to make sure the economy doesn't make too steep or too shallow a trajectory to landing.

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