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In yet another sign that the economy is already well within a recession and shows no signs of coming out of it any time soon a private business group’s measure of the health of the U.S. economy fell much lower than expected in July. The New York-based group The Conference Board reported Thursday that forecasts for future economic activity fell 0.7 percent, much more than the expected 0.2 percent. The index held steady in June, with no change, after falling 0.9 percent for the six months ending in July.

The decline was the steepest in the index this year and the largest decline seen in the index since August 2007, and paints a very bleak picture of potential economic growth in the near future.

The numbers are ``consistent with the weak economy right now, probably an economy in recession,'' James O'Sullivan, a senior economist at UBS Securities LLC in Stamford, Connecticut, said in a Bloomberg Television interview.

Fannie Mae and Freddie Mac are now nearly worthless, having each lost nearly 90 percent of their value in the last year alone. Fannie Mae shares dropped to just $3.75 on Thursday; Freddie Mac shares bottomed at one point at $2.68. A government bailout is now all but certain, and the possibility that the two federally-sponsored giants will be dismantled and sold for scrap is now a serious concern, according to Reuters.

Jobless claims fell last week for the second week in a row, but signs of a weakening labor market are omnipresent. The moving average of new jobless claims actually rose to 445,750 up from 438, 500 the previous week- the highest level in almost seven years, according to Reuters.

In America, it seems perception is everything. Amid our economic turmoil, it may seem egregious to say that our standard-of-living has continued to rise, but that is exactly what has been happening. Through pretending and borrowing, we have continued to live in a land of make-believe where we can always afford to live a little better, despite any real basis for this assumption. Due to our reprehensible spending patterns, Americans are encroaching the bursting of the most worrisome bubble of all: the standard-of-living bubble, according to CNNMoney.com.

For the past several years, the average inflation-adjusted total pay of American workers hasn’t been increasing, so there hasn’t been any foundation on which to build our living standard. However, we have continued to save less, borrow more and spend, spend, spend. Credit card debt is growing at exponential rates. With the bursting of the real estate bubble, borrowing from home equity was relinquished and people resorted to borrowing from their credit cards.

Americans began relying on their credit cards as a source of income and living under the false assumption that this extra money could increase their standard of living. However, credit card debt has continued to grow faster than the economy- more than 8 percent in last year’s third and fourth quarters.

Editor's Note: The following work is the fourth and final part in a series contributed by attorney, economist and author Perry L. Weed. Weed's article raises distinct observations about America's troubled economy.

Since the early 1990s, the growth of the financial services industries – securities, banking, insurance, mortgages, and related professional services – has been staggering. It is now a dominant economic sector accounting for nearly 20 percent of the U.S. economy. Its rise has been inseparably linked to record levels of excessive debt in the U.S., its ascendancy dependent on easy credit, leveraged borrowing and the ballooning of public and private debt. Washington has been an active enabling ally in this expansion with its deregulation and federal preemption policies. The debt of the financial sector is the largest in the economy, bigger than the debt each of the other three debt sectors – all governments, all households and all non-financial businesses.