Cramer's 8 Point Plan for a Sustainable Rally
How do we get the economy moving again? How do we get hiring going?
We need a free stimulus, Cramer said Tuesday, that would lead to the creation of many jobs and reduce the deficit at the same time. To do just that, Cramer devised an eight-point plan, which he thinks would create the backdrop for a sustainable, long-term rally in the stock market:
First, Cramer wants the Estate Tax retroactively reinstated, so that the billionaires who died this year will have their estates taxed.
"Not one thinking person in this country can understand why the President and Congress have not tackled this issue," Cramer said. "This is the most painless form of tax, goes right with the surety of the other constant, death, and allows for a huge pick-up in revenue, a reduction in the deficit, and no damage done to the economy."
Second, tax hedge fund operators the regular earned income rate on their fees. Cramer doesn't understand why these individuals are exempt. He thinks this would generate billions of dollars and the only ones hurt would be those who had the "outrageous privilege of manufacturing capital gains" from what most would consider normal income.
Third, Cramer wants the Bush tax cuts frozen until after Jan. 1, 2013. Steep tax hikes on capital gains and dividends raises very little income for the government and Cramer thinks it would crush the stock market. He hopes the economy will be allowed to recover before this tax cut is done away with.
Fourth, Cramer thinks the Card Check union organizing initiative should be off the table until 2013. If banks and retailers are made "easy targets" for unions, he thinks it could slow hiring in those sectors. In addition, pay for federal employees should be frozen because he thinks they already have it better than most private sector workers.
Fifth, shelve the plan to increase taxes on multinational corporations until 2013, Cramer said. If these companies are taxed, he thinks they'll continue to hold back hiring. If anything, he thinks they should be allowed to repatriate their overseas cash hoards with reduced taxes if they do hire.
Sixth, announce that you're shelving cap and trade, the controversial environmental legislation. Cramer thinks lawmakers should promise that the Environmental Protection Agency won’t "run amok in the absence of legislation and shut down plants that are employing people."
Seventh, the Obama administration should offer two trillion in 30 Year Treasurys to lock in the low-rates, Cramer said. They could use it to replace existing borrowings, even if the short-term cost of the rate differential seems too good to pass up. The US should seek to put the European-style liquidity crisis off the table.
Lastly, Cramer wants the troops withdrawn from Japan and Germany. He thinks a fortune is spent on maintaining forces that are meant to fight a war in Europe against the Soviet Union and to keep the peace in Japan. The cold war is over and they do nothing except cost us money, he said.
"You remove the uncertainty, you remove the single biggest obstacle to economic growth and new hiring in this country," Cramer said. "It doesn’t cost us a dime and it will create jobs. All we need is for the President to declare victory over rapacious health care providers and Wall Street bankers so he can create a less fearful, more pro-hiring environment."
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