The US govt is pulling out the stops to help stem this current financial crisis - including halting short selling.
Over 80 years ago, the world experienced a similar crisis - the Stock Market crash of 1929 where US companies lost 40 - 90% of their value. Back then, iirc, US Banks loaned money to European companies which was struggling out of the aftermath of the Great War (World War1). There was a crisis in the 1920s and nations put up big tariffs and started an economic war (on national lines).
Kaboom!!!! Chain Reaction. Companies couldn't export - so they shut down and couldn't pay their debts. Banks shut down because they ran out of cash. People withdrew money out of banks because they were scared. Banks refused to issue out more loans so companies which needed money went bust.
Things now look pretty scary. The US currently owes trillions of dollars in debt. And to pay for it- its printing more money to pay for it. If the US debtors like China start calling in their loans - or refuse to issue more credit - the US is screwed - their cash becomes worthless - then its really the end of the world as we know it. (Perhaps thats why the Chinese oil companies seem to be getting a big chunk into Iraq's oil fields).
Its actually no surprise the US economy is doing so badly - its a consumer economy - "free bread and circuses". What does the US produce today anyhow? Most of the stuff we use - is made by a Chinese or Japanese company. On top of all that- the US is now the biggest consumer of fuel - most of it imported. Is it any surprise that with the price of petrol gone up from $20 a barrel to $140 - something is gonna crack???