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D.C. Dithering Changed Equation: Cramer

NEW YORK (RealMoney.com) -- Here's a compelling question I just got: "Mr. Cramer, didn't you just say we won't have a recession, and now you are calling for a double dip?"

Let's parse this. Before the mind-bogglingly horrible compromise in Washington that took us to the brink, we were doing OK -- not great, not bad. We had some weak numbers. We had some good numbers.

But the damage that was done from the actual talks -- that's right, the actual talks -- was significant. The collapse of any plan in Europe, when we thought that was done, was significant.

I often find that people do not understand the fluidity of a given situation. They think that if the economy is good and you say it is good, and if big fundamental changes occur for the worse, it is just important to stay positive and just not admit, not that you are wrong, but that the facts changed dramatically.

Let me ask you, if we had a grand bargain to cut spending over time and have some taxes raised on the super-rich and came up with a plan to stop the mindless hiking of Medicare costs -- all of which were close to fruition -- do you think we'd have this morass? Do people believe that these events in Washington truly had no impact? That they were somehow in our past and that they didn't cause some damage?

It is so easy, in hindsight, to say, "The government will almost fail, and we will almost not pay Social Security or the military or our bond interest, so sell everything."

I wish I could have seen that coming. But it happened. We almost got there. That's a very big breakdown of a government that people counted on.

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