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Bush's plan calls for tax rebates for individuals and couples -- possibly $800 and $1,600, respectively -- and tax incentives for businesses, both of which could total $145 billion. While Americans might enjoy a little extra money, access to petty cash isn't the problem as far as Cramer's concerned.
"It's really just a good boost for Apple [AAPL
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]. People will buy iPods," he said. "Or maybe it's a bailout for Men's Warehouse."
According to Cramer, it's the collapse of the mortgage and mortgage-backed securities insurers -- like MBIA [MBI
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], Ambac Financial [ABK
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], PMI Group [PMI
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], MGIC [MTG
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] -- that's hurting the financials so much and causing the paralysis in the market. "I think these are the companies that are the lynchpin of what's wrong," he said.
Cramer offered a plan that called for a government handling of the pre-packaged bankruptcy of these companies and a guarantee of 50 cents on the dollar for all $500 billion in insured loans. Even if every loan defaults -- "which is way, way too negative," Cramer said -- it will take just $250 billion to get the economy moving again.
This and a 100 basis-point rate cut could rally the stock market 2,000 points immediately, he said. Wachovia [WB
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] and Bank of America [BAC
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] would go up 15% -- Citigroup [C
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] would double.
"So my plan's offereing 2,000 on the downside if you don't take it, and 2,000 on the upside if you do," Cramer said. "It's certainly a lot better than trying to write a check to Men's Warehouse."
Jim's charitable trust owns Citigroup.
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