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Cramer: Cliff Jumping, How Bad Would It Be?

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Is it possible that falling off the fiscal cliff won't be so bad?

A growing chorus of pros including strategic investor Doug Kass suggest that could, in fact, be the case.

In a New York Times article, Kass argued that one of the biggest stock market worries, the pain from higher capital gains and dividend taxes, would barely have an impact on the market because so few individuals have taxable accounts, only 14.7% of late, down from 23.9% just eleven years ago.

Other pros who subscribe to the thesis say that the job cuts for 2013, which CNBC puts at as many as two million, won't happen as fast and won't be as high.

Plus, they say, the tax increases can always be rolled back if it turns out that going over the cliff has a serious impact on the economy.

Cramer's Top Dividend Stocks of 2012

As much as Jim Cramer appreciates optimism, he just can't get on board with the theory.

"While nothing is irreparable when it comes to putting things back together again if we go over the cliff, I'm deeply worried about what will happen, certainly more than the school which says that the dire predictions are off the mark," Cramer said.

Here are three reasons why.

- Slashed Guidance

"First, if we have no deal when earnings season kicks off with Alcoa on January 8th, we've given CEOs the ultimate reason to slash their guidance. I mean, what kind of CEO would express any confidence in this country if we don't get a deal?"

"In fact, if I were a CEO who reports after the cliff jump, I would say that I'm thinking about laying people off because of slackened demand."

- AMT

"There's a possibility that maybe 30 million Americans will be thrown into the alternative minimum tax scheme."

"The AMT is an arcane, almost impossible to understand tax that, unlike payroll tax withholding, won't be visible until the end of the year. It could ensnare the average taxpayer by as much as an additional $3000 when he or she least expects it, the holiday season right before the introduction of Obamacare in 2014."

- Permanent Austerity

"I'm worried about the possibility that the new austerity becomes permanent austerity," said Cramer. That is, Cramer fears that the political divide in Washington is so vast that politicians accept automatic sequestration, rather than admit to compromise.

"For most partisan players in Washington, rising above means rising above the worries about a recession that throws people out of work in order to prove that the rich should pay more, or that no taxes should be increased, ever. In other words, a recession changes nothing for these guys."

What'sthe bottom line?

"I am still hoping we don't go over the cliff, but I simply can't be sanguine if we do, because I think that means the stock market will ultimately get hammered, even as it might bounce back if the forced austerity is lifted by a dreaded, hated compromise that both sides seem to despise."

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com

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