NBC's Curry Warns Minuscule Spending Cuts in Debt Deal Could Harm Economy

Appearing on Wednesday's NBC Today, CNBC Mad Money host Jim Cramer blamed the debt ceiling standoff for stocks falling on Wall Street: "All people can talk about is the whole slow down that Washington triggered, the 'manufactured crisis,' as the President mentioned..." Co-host Ann Curry wondered: "To what degree did the spending cuts called for in this bill have an influence in this perception?"

Cramer argued: "We've seen a trillion dollars lost in the stock market. Much of it is associated with companies that were doing well because of government – some people call it hand outs, I would say spending – and I think that, that is a huge part of the decline." Curry touted an over-the-top prediction: "One advocacy group, the liberal-leaning Economic Policy Institute, says the economy could lose 1.8 million jobs in the next year due to the cuts in this deal."

When she asked if Cramer agreed with the absurd assertion, he skeptically replied: "Too dark. I think that we're going to muddle through here. I'm not – that would be a setback to the 2008-2009 great recession. Not going to happen. Way too doom and gloom."

Despite Curry and Cramer fretting over the supposedly massive "cuts" in spending included in the debt deal, as Investor's Business Daily points out, in reality, spending will continue to rise and remain at above average levels.

Here is a full transcript of Curry's August 3 discussion with Cramer:

7:05AM ET

ANN CURRY: Jim Cramer is the host of CNBC's Mad Money. Jim, good morning.    

JIM CRAMER: Ann, good morning.        

[ON-SCREEN HEADLINE: After the Debt Deal; Is This What the Markets Wanted From Washington?]

CURRY: The markets were rattled by the specter of not having a deal, a long wait. But then on the day the deal was signed, the markets still plunged, what, 2%.

CRAMER: Yes.

CURRY: Why is Wall Street not happy with this deal?

CRAMER: Recession. All people can talk about is the whole slow down that Washington triggered, the 'manufactured crisis,' as the President mentioned, has made it so that all of this business has slowed down. Jobless, probably not going to be so great. Sales, bad. We're hearing company after company saying Washington created a huge mess. Not going away.

CURRY: To what degree did the spending cuts called for in this bill have an influence in this perception?

CRAMER: We've seen a trillion dollars lost in the stock market. Much of it is associated with companies that were doing well because of government – some people call it hand outs, I would say spending – and I think that, that is a huge part of the decline. Suddenly realized the big sugar daddy's gone away.

CURRY: You mentioned jobs. One advocacy group, the liberal-leaning Economic Policy Institute, says the economy could lose 1.8 million jobs in the next year due to the cuts in this deal. Agree? Is that too much?

CRAMER: Too dark. I think that we're going to muddle through here. I'm not – that would be a setback to the 2008-2009 great recession. Not going to happen. Way too doom and gloom.
    

CURRY: Okay, but you did mention the jobs numbers.

CRAMER: Yes.

CURRY: And we know that the jobs numbers were not good in June. There supposed to – new numbers come out for July this coming Friday. Prediction?

CRAMER: July was a really tough month in this country. I don't see a lot of people getting hired. I saw a lot of layoffs. It won't be disastrous. Again, nothing's disastrous, it's just not so hot.

CURRY: Okay, let's talk about what else is not so hot in the economy. Manufacturing production barely grew in July. Consumer spending dropped in June for the first time in almost two years. Economic growth for the first half of the year was at its slowest pace since the recession ended. So are we now starting to see the outline of a new recession?

CRAMER: Yes. Plain and simple. If things don't pick up, they're trending down. This is, again, not a mass unemployment about to occur, not something that I would describe as being catastrophic, but we're slipping back. And unless we see some job growth in the near future, we're not going to be back to where we were a couple of years ago, but we're going to be down.

CURRY: Well, do you see anything that's going to create this – some job growth that you just talked about?

CRAMER: That's the problem, I don't. I don't have a catalyst. I never come on this show and say, 'Look, the world is coming to an end.' And it isn't this time. But I don't have anything good to tell you. I don't see any reason to hire because there is so much new regulation, so many difficulties coming from Washington. Our trade partners are also not doing well either, from China, Russia, India, Brazil, all raising rates, and Europe is just terrible.

CURRY: So is this the – then the – what we talked about earlier, earlier this year, the double dip concern, is that what we're talking about? Is this the double dip?

CRAMER: Double dip would imply that one dip would be as worse, equal to the other. This dip, and we are having one, is not going to be what I would regard as being nearly as horrible as what we had, just nearly.

CURRY: Alright, Jim Cramer, thank you so much and I really appreciate your perspective. We need good news. Please bring it next time.

CRAMER: I'm trying. I'm looking for it everywhere.

CURRY: Alright, you can catch Mad Money week nights at 6:00, 11:00 p.m. Eastern Time on CNBC.