"Since 1776, it's never paid to bet against America."

                           --Warren Buffett, January 2009

The big news over the past month was the passage of the Patient Protection and Affordable Care Act (PPACA) in Congress.  The bill, which pundits have called the most ambitious piece of social legislation in the last 40 years, aims to extend healthcare coverage to an additional 32 million Americans at a projected cost of about $940 billion.  Debate over the bill was sharply divided along party lines.   Proponents hailed it as progressive step forward, while opponents, lamenting already significant fiscal deficits, argued that increased competition rather than government-run health care was the solution to containing ever rising costs.

While it's not our focus here to weigh in on the political merits of the bill, we do note that the market--unlike most political pundits--seemed to have a muted reaction to the legislation (the S&P 500 is up about 3% since the eve of the PPACA passing).  This should serve as yet another reminder that financial markets are resilient, forward-looking, and that they care less about political ideology than political uncertainty.  

In that spirit, we revisit the above quote from Warren Buffett, made near the worst depths of the stock market decline in 2009.  At the time, pessimism reigned supreme and debate raged over TARP bailouts and pending fiscal stimulus legislation.  In April of 2009, the Congressional Budget Office (CBO) estimated that TARP's ultimate cost to taxpayers would be about $375 billion.  Just over a year later, with the stock market up nearly 50% and several banks having repaid their TARP borrowings (with interest), CBO now estimates a taxpayer cost at $109 billion, or less than 1% of U.S. GDP (by comparison, the direct cost to taxpayers of the late 1980s savings-and-loan crisis was about 2-3% of GDP).