Norquist pledge can send us over the cliff
If those who signed it believe compromise is heresy, we will end up with no budget deal.
The Republicans who signed the no-tax increase pledge -- the one put together by anti-tax strategist Grover Norquist -- have no room to maneuver when it comes to compromising to avoid the fiscal cliff.
Norquist is the real force behind the Republican Party's strategy when it comes to the talks to avoid the cliff. He has made it clear to anyone who signed the pledge, and that's pretty much every Republican, that they will be embarrassed and shamed out of their "impure" thoughts. They will be forced to get back in line, or risk being outed as closet Democrats who favor bigger government and higher taxes.
In other words, those who signed an allegiance to Norquist have no choice but to send us over the cliff. They are duty-bound to do so, frankly, regardless of whether they like it. They took the pledge; they have to swallow the cliff medicine.
Unless the pledge is broken by those who signed it, there won't be enough votes to put through a package to avoid the cliff.
Put aside for a moment the issue of whether you hate President Obama or like him. I know, I know -- that's virtually an impossibility these days. But accept the view that the president will not accept any deal that does not have tax increases.
Then accept that Norquist, who is by far the most powerful ideological force behind the Republican Party, will not allow those who signed the pledge to get out of it without a promise that they'll be fired by their constituents.
Assuming these two factors, there will be no choice. We will have to get the onerous austerity package -- the one that was created to give us Spain-like budget cuts and tax increases -- even though we are nowhere as profligate and anti-tax as the Spanish had been before their forced cliff jump.
Now, I am sure many of you say, "Wait, why doesn't the president have to give? Why doesn't he have to surrender to Grover Norquist, too, in order to get a deal done? Why doesn't he have to bend his will?"
Don't laugh, but when I pulled up with Norquist, an old acquaintance from college, he marveled at how obtuse the president was not to see that we need to prevent tax increases. He appears to believe that, if the president were to sign the no-tax-increase pledge and then go with the program cuts wanted by the Republicans, there will be no deficit and the U.S. will grow to the sky.
That's my summary of Norquist's view, whether Norquist thinks that's accurate or not. You can't help but draw that conclusion.
Here's the issue with our obstinate president. He campaigned and won on a pledge to raise taxes and cut spending. Norquist didn't campaign. He didn't win. The president is all hung up on his pledge -- the one that the voters agreed with.
The fact is, again, regardless of whether you like him, the president has said he will be willing to cut spending. He awaits the Republican anti-spending plan. If they propose one, I think he will agree with some of it, provided that the Republicans agree to some tax increases. It is called "compromise" where the president comes from.
Where Norquist comes from, it is called "heresy." No compromise is allowed. That, to me, is why the only hope for a deal is to have the pledge broken in favor of avoiding the fiscal cliff. Norquist doesn't care about the consequences of the cliff; he cares about exacting the consequences of violating the pledge.
I think we have to stop obfuscating. If you think the no tax-increase-pledge must be upheld, then you can't believe in compromise. If you can't believe in compromise -- which, in this case, would mean tax increases and spending cuts -- then enjoy the cliff jump, because it simply must occur.
I'll have more on what that world looks like later in the day. But let's just say that, if you like stocks going higher, you want the pledge broken. If you want them lower, then go with the pledge.
Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust.
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Better now to go over the fiscal cliff
look at it this way the national deficit is about 1.8 trillion and as more and more baby boomers retire and minimum wage slum workers replace them the deficit is only going to grow bigger.
To trim $1 trillion over 10 years or 100 billion a year (even this does not start right away but in a couple of years) is not going to put a dent in the national deficit it will grow by this amount or more each year
We are so doomed folks looking only two years out the deficit will hit $2.5 trillion and only get worse.
The policticians are not telling you the truth. The Federal Reserve is having to buy US debt just to keep the country afloat. And those mafia guys are not going to do it forever.
We have compromised ourselves into over 16 trillion dolars in US debt, over 121 trillion dollars in US unfunded liabilites, and over 4 trillion dollars in debt among the 50 US states.
We are such fools!! "Thank you sir, may I have another?"
I would rather take a pledge from lawmakers that any new war is coming with a war tax in exact amount of the war chest and for the duration. If you compare to the family budget the "rain-day funds" are put aside when the sun shines (and that was in 2000) and not when heavy rains are on us.
This way or that we will have to pay for the war we approved as a whole to profit few.
There comes a time when spending must cease - just because you still have checks in your checkbook doesn't mean you have money. There comes a time when there is to much administration and not enough workers to support the top. A skyscraper will not stand on to small a foundation. You cannot add to the top of a building by taking materials from the foundation and adding it to the top. Someone has to take the responsibility for putting a stop to the ever increasing waste, overspending, and expanding government. We cannot pay the national debt, nor balance the budget by expecting an already overtaxed population to pay even more. We can however begin to repay the debt by passing on the cost of doing business in America to those that benefit from it most; by reinstating the import tax and that includes goods produced in foreign countries by American corporations. Give them tax breaks to bring home the work and additional tax penalties if they don't. You all claim to want the jobs brought home and yet none of you have given any suggestion about doing so. The jobs go overseas because it's cheaper there. Duh! How do we stop that? By making it more expensive to work there than here. We were a prosperous nation when we had the import taxes and tariffs. Which was done away with by NAFTA put into effect by Bill Clinton another ignorant democrat. We are a nation capable of self sufficiency and yet we have given away most of our independence to third world countries because they are willing to work for it for less. Yes, if we impose the taxes we will pay more - for a while, until the jobs come home and the people return to work and the money begins to stay here instead of flooding out of our coffers and into foreign countries. It will take time but we would return to having more GNP than debt. I personally don't care what party does it - Just grow a pair and "Git 'er done!"
Compromise is also not coming out of the mouths of the Democratic leadership in Congress.
America was attacked during the Bush Administration. While I lament for those killed in the 9/11 crashes, no one can deny that paper and button pushing FREAKS took us administratively over and drove us to today's brink of ruin. The BELL TOLLS, it tolls for connivers and jivers who didn't want to really work for a living but assumed themselves worthy of the perks AND for those who made wages and salaries for their working life and now condemn those who do now. Time for change has passed. Time for CORRECTION is here. ZERO tolerance for the Norquist thugs and the GOP Adverse Agenda.
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