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.
More from TheStreet.com
This "fiscal cliff" is not a sham, nor smoke and mirrors..It's real, VERY REAL.
And some are "hung up" on Fast and Furious and Benghazi...That's your "smoke and mirrors."
We have had some children and young parents(about 6) get killed around here in car crashes over the last couple months...
Do you think I am real concerned about 1 Ambassador, and 2-3 Contracted Security people dying in Benghazi...?
They should not have been in Libya ANYWAY....It was an Ego trip for all of them..
Sweet Geezus.....Earlier comment I had Clinton trying to kill Obama, that has since been corrected and now reads Osama, as in bin Laden...I need more coffee.
And about these Wars.....THOSE THAT PROFIT from them, should have to FUND them, with their own money and FAMILY members....If so, all wars would stop in a matter of days.
The days of Kings and Knights marching at the front..Disappeared eons ago.
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.
Big problem we have is People like you MG.....You and Ilk are still screaming, Marxist, Socialist, 57 Donkeys and Leech class..
And on the other side, we have the 47%,people that hate the Rich, blame all their problems on the Elite, can't or won't get a job...And are yelling gimmee,gimmee,gimmee..And are tree huggers.
I wouldn't want to sit down at that Poker table, would you ??
BUT, we have re-elected this President, so we have to move on, and use some sense in doing so.
Rich people would rather see a tax percentage increase than a revision of the tax laws. They got this fixed. They will look like your whipping dog all the way to the bank again.
How does it feel to be used by your president liberals? He's not quite the patriot you thought he was.
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.
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.
Geezus christ, You all want to get partisan about this right out of the GATE...
You accuse Obama as a "my way or the highway" President about his policies...
YES, we know for a FACT, that is not the case with Boehner and the little boys,plus the TP'ers.
Sure we know that to be true, Right?.....YOU WANT TO PUT US RIGHT BACK to square one..
That is STUPID..
Funny, it was okay with Conservatives and Republicans, when "little Bushy" said, " I've got Political Capital" after being elected instead of appointed by SCOTUS...yeah you remember that don't you ??
Then he spent it and us, on the rest of TWO WARS...For absolutely NO REASONS..
Neither Bush 1 or Bushy 2 knew anything about fighting Wars in the MiddleEast, that was obvious.
The second time around was the kid, trying to SAVE FACE for his Daddy..They both were bunglers.
At least Clinton kept us out of almost WW3..which is about what this is now...He tried getting Osama a couple times....Damn near got him once...And they were doing it on the "sneak" as we should have....We DO NOT need to kill (or get them killed) 100s of thousands and 1000s of our own...
To get ONE or TWO people....Serves no useful purpose and everyone hates us for it.
Clinton knew that...And was one hell of a lot smarter or Political, when he made the deals with Republicans and they all stepped across for the "Good Times" we had.
Along comes Bush....We get "blown up" because of Bush Family ties to the ME and the Saudis, and "no controls" on Israel; It was a vendetta from the beaten down al Kaida and bin Laden...We knew it was coming.....And it has put us where we are today..So give this President a break.
Compromise is also not coming out of the mouths of the Democratic leadership in Congress.
Final consumption sales tax only - no item or person exempt – When a family goes into a grocery store and buys $100 in groceries and the clerk adds $5 for local tax, $7 for county, $15 for state tax, $35 for federal tax and $45 to pay off the federal debt, the crap will come out of the American peoples head about the cost of government.
Then give the American people the right to directly decide what they are willing to buy through government, (by pass congress). Socialism, liberalism, high government spending will end. In 4 years the American people will reduce government spending by 35% and increase the productivity of our tax dollars by 400%
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?"
Copyright © 2014 Microsoft. All rights reserved.
Stocks are facing some serious resistance as the bears tear into the market's respite.
VIDEO ON MSN MONEY
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.