Democrats and Republicans believe that spending is out of control and that the government is too big, Jim Cramer said on his

"RealMoney" radio show Monday.

And while he doesn't care about the complaints, he said there's a way to make some money on the brouhaha over spending.

Whether it's right or wrong, Cramer said that the government is spending, and the sectors getting that money will grow. For example, Cramer said that 75% of the budget is going to the military and that there are not that many military companies out there.

He said that any one of them is a good buy, including

General Dynamics

(GD) - Get Report


Northrop Grumman

(NOC) - Get Report



(RTN) - Get Report



(BA) - Get Report


L-3 Communications

(LLL) - Get Report


Prescription health care is also getting lots of government money, and Cramer attributes this to the new Medicaid Part D prescription program. Don't bother with pharmaceutical companies like


(BMY) - Get Report



(PFE) - Get Report



(MRK) - Get Report

, he said, because these companies "have problems" and don't really benefit from the legislation.

The company that helped write the law will benefit, and that company is

UnitedHealth Group

(UNH) - Get Report

, which is down from its 52-week high, he said.

For a less pricey stock, Cramer suggested the nation's third-largest drugstore,

Rite Aid

(RAD) - Get Report

, because senior citizens are going back to drugstores nationwide now that they are getting the hang of how to use this difficult program.

Even better, Cramer said, would be


(CVS) - Get Report

, the second-largest drugstore, or his favorite,




Image placeholder title

Bush's "No Child Left Behind" policy is making money for the U.K.-based textbook publisher


(PSO) - Get Report

, which is the largest textbook company in the U.S.

The stock pays a 4% yield, and the company also publishes the

Financial Times


The Economist


The student loan business should also do well as more people go to universities and the price of higher education rises. That means a company like

First Marblehead

, which takes care of most of this country's student loans, will do well. Cramer said he believes that they will "blow their earnings away."

The government is also spending on infrastructure, which means money for


(TEX) - Get Report

, a maker of maker of cranes and off-road trucks necessary for mining projects and highway building.

It also means money for


(CAT) - Get Report



(IR) - Get Report


Vulcan Materials

(VMC) - Get Report



( RIN) and

H&E Equipment Services

(HEES) - Get Report


A listener emailed to say that she bought Caterpillar at $71.90 on Cramer's recommendation, and now it's up 3 points. She didn't just grab the stock on his suggestion, she wrote.

The listener, who lives in Decatur, Ill, said that while doing her homework, she looked around and saw that business was so good at the local Caterpillar plant that it is on a hiring boom.

Cramer said that he recommends that first-time investors buy what they know.

Many of you ask what to invest in, he said. "Look around. Invest in what you are familiar with. ... Look in your medicine cabinet. Look in the kitchen."

This is because it's important to know your stocks and know why they are good companies. Then when "the inevitable happens and the market goes down," you feel like you can buy more rather than freak out and sell on weakness.

Movie, Phone

When prices at the pump go up, maybe it's time to buy some


(CVX) - Get Report

, he said.

If you're doing your homework, Cramer said you would have seen see reports that consumers may now download a movie on their computers the same day it is released on DVD.

This is good news, he said, even though there are still flaws. It takes an hour to download a typical feature film, and you can only watch it on your computer and two other PCs. Moreover, you can't make a copy of the film to play on your DVD player. But as demand grows, Cramer believes that these limitations should change.

This latest development in streaming video made him like


(AKAM) - Get Report

even more, despite the fact that the stock is up well over 100% year on year.

The company makes the technology that lets companies stream music and movies on the web.

But only 25% of all movies are now expected to be downloaded, he said, so the DVD business is still a good one. Cramer would be a buyer of



, a company that makes DVDs.

But he would sell


( BBI) and

Movie Gallery

( MOVI).

A caller wanted to know if Cramer would still be a fan of

(FCNTX) - Get Report

Fidelity Contrafund if it were no longer run by Will Danoff.

Cramer said that when he recommends funds, he is recommending the fund manager. He believes that Danoff is one of the best in the business, and Cramer would not be as quick to recommend it if Danoff left.

When two companies announce a merger, the acquirer's stock usually falls because it must issue new stock to pay for the deal. The flood of shares dilutes demand and the stock price goes down.


( ALA) finalized bid for


( LU), and must now issue "a gigantic amount of shares." But Alcatel stock did not sink. In fact, it jumped.

This "made me sit up and take notice," Cramer said. And it's because Wall Street can't help but love this merger.

First of all, it lessens the number of competitors in the field, he said. This makes it easier for Alcatel to surprise to the upside and lessens the possibility of a price war.

Plus, Alcatel specializes in high-speed digital subscriber lines, while Lucent takes care of wireless technology. Cramer said the merger creates one-stop shopping for telecom companies such as


(VZ) - Get Report



(T) - Get Report

, which are spending like mad.

He said other companies that will benefit from the current telecom buildout include


(FNSR) - Get Report





MRV Communications




(CNXT) - Get Report



( AVNX),


(CIEN) - Get Report






( BKHM).

They could all be acquired, he said. Even if they're not, these companies are doing well on the telco revival and will be winners because their earnings will be strong, Cramer added.

A listener wanted to know why he should bother doing all this homework when Cramer is there to tell him what to buy. Moreover, he can follow along with Cramer's own portfolio,

Action Alerts PLUS.

Cramer said, "Just like everyone else, I make mistakes. I'm not always there."

When the stock market goes down, as it always does, he said investors need to know what to do. That's where homework comes into play.

If he recommends a stock but then doesn't come back to it, you need to have done the homework to understand why it was a good buy and when would be a good time to get rid of it.

You need to be confident yourself, Cramer said, and for that confidence you need to know why you like a company.

At the time of publication, Cramer was long UnitedHealth Group.

James J. Cramer is a director and co-founder of He contributes daily market commentary for's sites and serves as an adviser to the company's CEO. Outside contributing columnists for and, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for

Action Alerts PLUS. While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by

clicking here. Listen to Cramer's RealMoney Radio show on your computer; just click

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here to order Cramer's latest book, "Real Money: Sane Investing in an Insane World," click

here to get his second book, "You Got Screwed!" and click

here to order Cramer's autobiography, "Confessions of a Street Addict."