When the G-7 meeting ended Treasury Secretary Geithner expressed his opinion as to the measures needed to address the global economic problems. Why he viewed himself eminently qualified to offer an expert opinion when he is the architect of the this country’s failed response to the global crisis is unclear to me. None-the-less in an article written in and for the Financial Times the U.S. Treasury Secretary suggested that the EZ had to generate confidence that it can and will resolve its crisis. He also wrote that the US would generate economic growth and put its people back to work. The Secretary alluded to the President Obama’s anticipated announcement of his 2^nd stimulus package. The polls in the U.S. show that most American’s do not have confidence in the President’s ability to solve the country’s economic problems.

Feeling the pressure of his dismal ratings and the ever worsening financial crisis in Europe President Obama announced to a joint session of Congress the details of his 2^nd stimulus package. The core elements of the package are designed to return Americans back to work.
Business leaders and economists doubt that the program’s relaxations of the payroll tax will encourage companies to start hiring. They point out that new hiring is generated by business expansion and not by governmental fiat. Clearly no company, small or large, will take on new employees when there is no immediate or future need for more labor. At this time company executives lack confidence that the overall economy will improve anytime soon. More importantly; these executives agree with the general public’s perception that Washington’s political gridlock is not an incubator for novel ideas or  political courage. In my opinion President Obama must abandon his own political  ambitions and exercise leadership and courage if American is going to solve its economic problems. Americans like their European brethren lack confidence in their leaders’ ability to solve the economic crisis.

In a speech today Greek Prime Minister George Papandreou stated that he would do whatever it took to rescue his country from bankruptcy. I believe that he would say almost anything if it would lead to additional funds for his country. The Prime Minister emphatically stated that Greece would not leave the EZ. Luckily for the EZ its members have the final say if Greece remains a member and not the other way around. Of course if Greece sought to voluntarily withdraw from the EZ I do not believe that there would much opposition to its decision.

While the Prime Minister was attempting to reassure his wealthier EZ benefactors protestors demonstrated in the streets. If 7000 extra police had not been patrolling the streets of Thessaloniki more protestors would have arrived to participate in the demonstrations. Maybe the protestors understand more than their government gives them credit for; Greece’s economy is shrinking and not expanding. No one believes that Greece will stave off a default indefinitely.

It was only a matter of time before discord in the European Central Bank surfaced. Jurgen Stark, a German who was the banks de facto economist and a member of its policy-setting governing council, resigned his position.  It was well-known that Mr. Stark did not agree with the bank’s buying bonds to ease pressure on Greece, Italy, and Spain. Mr. Stark is a well respect economist and his opinions carry great weight. Obviously he understands the dangers of the bank using its resources to buy debt from these countries. I am sure that Mr. Stark does not believe that the banks funds should be used to placate opposition to austerity measures in these countries.

EZ and US cannot spend their way to economic prosperity. Difficult decision must be made on how to cut public spending and governmental debt. Political expediency might dictate the undertaking of massive spending projects and bailouts. These actions would only postpone the implementation of austerity measures and debt reductions initiatives, which are needed to bring stability to the markets. People do not believe that in the future “things will be better.” This lack of confidence is the primary reason why the EZ and US economies have been stagnant for so long.