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A Lack of Leadership

9/28/2015
By Charles Payne

There are additional reasons for subdued confidence in America- our rudderless ship in Washington D.C.  Consider the June poll on American institutions from the Gallup organization.

Confidence, measured by “great deal” and “quite a lot” in the three branches of government ranked poorly:

  • Executive 33%
  • Judicial 32%
  • Legislative 8%

So, while it was a bombshell, the resignation of John Boehner as Speaker of the House wasn't a surprise and for many, it was a relief.  It sets up a battle for his replacement and perhaps the soul of the Republican Party.

This matters to investors for several reasons, but immediately; it could set off a battle over the budget, and even the use of continuing resolutions (CR).  Boehner didn’t relish battling conservatives who were willing to shut down the government over the federal funding of Planned Parenthood.  Now, there’s talk that his replacement should draw the line at the use of CR, which has been implemented more than 50 times since 2001.

It’s a cowardly way to ignore issues that fester and become even more problematic.

Catalonians Speak

Over the weekend, elections in Catalan saw major win for the secessionist movements.  If the anti-capitalist joins the “Together for Yes” coalition, we could see the beginning for an independent Catalan.

The EU has threatened to kick Spain out if that happens.

The movement against bloated governments, looking to maintain welfare utopias at the cost of true prosperity and opportunity isn’t just an American phenomenon.

The U.S. government has shut down 18 times and the world didn’t end.

There’s a chance a shutdown could pressure the market, although I think investors are more knowledgeable and most aren’t going to sell their investments because D.C. can’t get its act together.

The fact of the matter is that our government is bloated and controlled by special interest.  It’s forgotten about the nation as a whole, mastering the art of being re-elected by bringing home the bacon, even as our national debt level has soared past our annual gross domestic product (GDP).

This is what the 2016 election will be about and it could be the ultimate moment of truth.  How much more debt can we accumulate before reaching an inflation point of no return?

Moreover, how much longer will households that have made enormous sacrifices, including reduced paychecks accept reckless spending by the people elected to protect the nation, not harm the nation?

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Charles Payne
Wall Street Strategies


 

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