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Dave Pyatt: Actions undermine economic confidence

Despite some reports or fears of our demise, the United States in the last few years has made a comeback.

The stock market is at a record high, although it must be noted that a large portion of the incoming money to various hedge funds could be traced to such things as drug cartels (hard to determine accurately) and from international sources of all kinds. I wouldn't be surprised if Vladimir Putin, allegedly the world's wealthiest man, doesn't have a piece of the action.

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For the moment, the United States is still the best place to park one's money (or at least the best of several not so good options) for financial return. European vacations are now a bargain, assuming you can get an airplane seat and somehow get a lanky frame into a matchbox-sized seat. Hotels, goods and food are probably 25 percent cheaper than a year ago.

It is my belief that the November 2014 elections and recent actions, including almost shutting down the government over a presidential action on immigration (while I'm not sure there is a perfect answer for immigration "reform," it was at least well thought out and made both sides almost equally unhappy), but most importantly the recent decision to send a congressional letter signed by 47 senators to the Iranian leaders, accelerates international loss of confidence.

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I spent most of my career working with nuclear weapons, mostly with the federal government, am a nuclear engineer, and spent much time in the past few months reading available synopses and unclassified material on this topic and recent arms reduction efforts. There is no panacea, but the consensus seems to be if you remove the politics (which is nigh impossible), that the proposed Iranian arms deal (although some of the details are sketchy) is frustratingly difficult and far less than ideal, but certainly a substantial improvement over doing nothing. It appears to have a 10 year time of limitation. Either way, Iran is on the threshold of becoming a nuclear power and, short of either a nuclear strike from the United States or Israel or a massive military undertaking, will eventually get there. Talk about a plunge in the stock market that would be.

I was taught that the "invisible hand" as economist Adam Smith proscribed made the economy work. Our growth was based on sound economic principles, and that there was an "age of reason" at play. The underlying premise was that the United States government would continue to expand indefinitely.

I wonder if that's the case anymore. Even financial pundits like Warren Buffett are scratching their heads, as per his latest letter to shareholders of Berkshire Hathaway (which prudent financial advisers read religiously), whereby he is much more elusive than ever before and not quite so upbeat.

Our economy and our nation will likely survive this recent letter by the U.S. Senate to world stability, but there is a reasonable chance we won't. More worrysome is that the disagreement between the President and Congress will eventually lead to an unanticipated event, and I see it coming with the next year, that we may not be able to survive without the world losing confidence in our fiscal leadership.

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Once confidence is gone, it's gone. Just ask the British, whose currency used to be the gold standard for almost 200 years until ending just after World War II.

Dave Pyatt writes from Mount Airy.

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