Whenever our financial markets commentary strays into the realm of politics, we're guaranteed to offend at least half of our clients and readers. So let us state up front that our job is NOT to choose sides but to evaluate how politics will affect the US economy and by extension corporate earnings, which are the bedrock of stock market performance. By that measure, the current tactics of House Republicans to shutdown the "non-essential" parts of the federal government and block raising the debt ceiling is an unmitigated disaster. Businesses crave predictability and reliability. Just tell us the rules, and we'll figure out how to adapt. At present, businesses don't know if their invoices to the Federal Government will be paid, how the furlough of 800,000 workers will impact their sales, and how the political battle over providing healthcare will impact their cost structure.
Core to the functioning of the US political system is that the majority rules. The Patient Protection and Affordable Care Act was enacted by Congress in March 2010 and signed into law by the President on March 23rd, 2010. The constitutionality of the law passed muster with the Supreme Court on June 28th, 2012. The law was tested again in November 2012. Governor Mitt Romney, whose Massachusetts Health Care Insurance Reform Law, was the model for the Affordable Care Act, campaigned aggressively on the repeal of "ObamaCare" (and lost.) By reasonable measure, the Affordable Care Act reflects the will of the people, even if the people don't quite understand the details and won't understand until January when the bugs are ironed out.