Over the last year, the government has thrown trillions at the economy, most recently helping people get rid of their clunkers.

Some economists see hope in the recent Philadelphia Federal Reserve business activity index when it rose to 4.2 in August versus minus 7.5 in July. The rise exceeded even the most optimistic forecasts breaking a 10-month contraction. Helping the index was a jump in new orders.

I look at this and think "is this all we get for spending trillions of taxpayer dollars?" I tend to agree with Alan Ruskin, chief international strategist at RBS Securities in Greenwich, Connecticut who in a recent CNBC article stated "The combination of the inventory cycle, and the impact of special factors like the cash for clunkers (program), will probably see manufacturing sector data overstate the general improvement in the economy."

Even with all this government spending, we are still losing jobs as evidenced by the 576,000 initial claims for state unemployment insurance benefits reported today. Housing continues to be in a slump and according to the Mortgage Bankers association, late payments on U.S. mortgages increased to a record in the second quarter, with almost one in eight homeowners delinquent or in the foreclosure process.

Given that demographics are against us (aging baby boomers) and the government printing presses are running full out, I can't see future growth engine that will give the economy the boost that it needs.

What do you see and think?
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Steve Belli

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