The Supreme Court in a 5 to 4 decision with Chief Justice Roberts siding with the majority has upheld most of the Affordable Care Act by ruling its provisions constitutional under the federal powers of taxation. Four of the liberal judges considered it constitutional under the federal powers to regulate commerce and trade but Justice Roberts rejected that approach but accepted the act and wrote the majority decision  under the powers to tax. The only part of the act struck down was the right of the federal government to impose penalties upon states refusing to expand medicaid, the health insurance program for low income and destitute people. This might turn out to be a problem that will need correcting but for the time being the decision is a major victory for President Obama and the American people. For his part Governor Romney and the Republicans insist if they capture the Presidency they will repeal the act on day one. the entire decision is available on the wsj site and from the court. Justice Ginsburg’s dissent on the power to regulate commerce is very revealing and informative.

In Europe the Eurozone leaders continue to debate how to rescue their economy from bond market blackmail. Chancellor Merkel appears to continue to oppose a major stimulus and the use of eurobonds and continues to push for fiscal austerity. Some of the others are in favour of the ESM buying government bonds directly from governments in the primary market or perhaps a portion of the debt above a certain threshold. This would help although not do much for employment creation unless governments spent the proceeds on direct job creation. We await their decision with great interest.