Will the U.S. escape a recession?

I have been getting a handful of questions lately such as:

1. How bad will next year's U.S. recession be?
2. Might it even be a depression?
3. What effect will it have on the rest of the world, particularly China and India?

To learn the difference between a recession and a depression, see: Recession? Depression? What's the difference?

Mark Perry at Carpe Diem suggests that the U.S. is not headed for a recession. He gives seven reasons; I find the first two most interesting:

1. We won't have a recession unless and until the Business Cycle Dating Committee of the National Bureau of Economic Research says so, and that committee doesn't look at the value of the dollar, oil prices, financial sector troubles, or even the stock market, when it determines that a recession has started. It looks at industrial production, employment levels, real personal income, and real manufacturing and trade sales. In the discussions about recession, too much attention is paid to the subprime crisis, the falling dollar, the stock market and oil prices, and not enough attention is paid to the 4 variables that really matter - and none of them show any weakness...

2. If the serious S&L crisis in the 1980s, when almost 1,500 banks failed (about 1 out of every 10), didn't cause a recession, then a subprime mortgage crisis by itself won't cause a recession. The banking sector has never been more stable than it is today - not a single bank failed in 2005 or 2006 (out of about 8,000), and only 3 have failed in 2007. That has to be a record unmatched at any other time in U.S. history.

I am not as optimistic as Prof. Perry, but I have to admit that his logic is sound.