There were monumental changes in both the economy and economic policies this past year.? While business activity continued to decline during the first half of the year, by mid-year the economy began to grow.

Some attribute the turnaround in the economy to an unprecedented 18% increase in federal government spending.?? However, in spite of much talk about government stimulus, increases in federal spending tend to be associated with economic weakness rather than strength.

Some economists believe that government spending can boost total spending.? This view first emerged during the 1930s when total spending collapsed and prices were falling.? Few associated the collapse in spending with the Federal Reserve