This article was originally published Jan. 26.
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Good news in housing can trump bad news in unemployment, but only if President Barack Obama comes through with a tax credit for homebuyers, Jim Cramer told the viewers of his "Mad Money" TV show Monday.
Cramer said the market is hopelessly stuck between two opposing forces: housing and unemployment. "Dodge one," he said, "and get gobbled up by the other."
He said Obama seems to have a plan for fixing unemployment with his stimulus package, but there's been no mention from the administration on how to fix the housing market.
To fix the housing problem, Cramer is advocating a $25,000 tax credit for the purchase of an existing home.
Cramer explained that while the new home builders have lobbyists in Washington, more new homes will only make things worse. He formed his own one man lobby to promote the purchase of existing homes.
He said it's been proven that low prices, combined with low interest rates, bring out buyers, and a reduction in existing home inventory is exactly what the market needs.
Cramer said a boon in existing home sales would help ailing bank stocks, which desperately need additional capital and solid loan portfolios.
Cramer urged Obama to consider his tax credit proposal to fix the housing problem and lift the economy.
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