CNBC’s Jim Cramer predicted a possible recession by Christmas if lawmakers didn’t step up and make some sort of deal in regards to the looming fiscal cliff. His prediction came during an Nov. 11 appearance on NBC’s “Meet the Press.”
“We can gift wrap a recession by Christmas. We can set it right into place without some agreement,” Cramer told “Meet the Press” host David Gregory. He attributed that week’s stock market drop to that same lack of certainty.
The “Mad Money” host went on to elaborate on the major issues facing businesses if lawmakers fail to address the fiscal cliff. Cramer said he’s personally talked to many different people and found that businesses “don’t want to hire” because with a “series of unknowns who can take a chance? Who can take a chance with Washington? Better to scale back retail, restaurant, industrial, bank. Fire people! That’s the solution to the fiscal cliff.”
The fiscal cliff is the combination of $7 trillion in tax increases and spending cuts over 10 years that is set to begin Jan. 1, 2013 unless something is done to prevent it. According to Cramer, until a deal is made businesses will choose to “scale back” and “fire people.” Back in August, Marketplace reported that defense contractors might have to lay off workers if the fiscal cliff isn’t resolved.
Cramer also said that CEOs have no choice but to work side by side with Washington to create a solution. “Their businesses are going to go down, their stocks are going to go down. This is what they care about.” Cramer predicted that stocks and compensation will drop if a deal is not made in Washington by the end of the year.