[video] Jim Cramer Quick Take: Check the 14th Amendment
NEW YORK (TheStreet) -- Worries of a first-ever default by the United States are growing but TheStreet's Jim Cramer told Debra Borchardt the lights will stay on.
The Treasury Department estimates that it will hit the current debt ceiling on Oct. 17, but that doesn't mean the government will simply stop paying its bills, Cramer said. He alluded to Warren Buffett, who has said that contrary to what many think, the government has enough funds to keep making payments for roughly one year.
Cramer added the government can definitely make the interest payments and has been helped along by the Federal Reserve artificially holding down interest rates.
As he sees it, in the 14th Amendment of the Constitution the language implies the nation must pay its debts, and Cramer suggested President Obama should use this amendment as a way of forcing a resolution. While some critics have said that it won't work, that doesn't mean the President can't try, he believes.The debt ceiling could be a big deal if the bond holders start selling if they think the U.S. can't make its bond payments, Cramer said. -- Written by Bret Kenwell in Petoskey, Mich. Follow @BretKenwell
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