Cramer: What's the debt-ceiling plan?
Jim Cramer | [email protected]
These are the central issues. The Treasury secretary is almost too confident that everything will be resolved. The House speaker is equally confident.
What the heck makes them so confident? The only thing that seems to get everyone focused is a drop-dead deadline, and we don't have one because of the peculiar nature of money in and money out with the federal government.
Frankly, anyone who says what the world will look like on Oct. 18 doesn't really know. You would have to anticipate what the ratings agencies have to say and what the money in the till would be and whether Jack Lew can really prioritize things.
Then we don't really know when the government needs to actually raise money. Is there an alternative way to raise money that we don't know about? Is there a way to sell property that could quickly raise money? Sell gold? It is just hard to figure out what happens Oct.18.
But we do know what happens if we have to issue paper and we are not allowed to. Business just stops. It just stops everywhere. Every part of the world.
I think you could even argue that we will be in a cash economy because everyone has to figure out what they really own and what they are allowed to own and what can't be owned, as so many businesses assume that Treasuries are risk-free.
The idea of even one day of skipped interest payments is horrendous. But what comes in that day? What do they have in the till that day vs. what can come out?
Is it better to just stop Social Security checks? I would think so. Stop Medicare payments? Absolutely. Is that the hidden agenda of some?
All I know is that it is unthinkable for the U.S. to not pay its debt. It just puts us at the bottom of the heap and puts every institution that owns Treasuries at risk. Which is pretty much everyone.
You can argue that because so many have them, we can, in a sweeping way, declare that everyone's going to be fine. But I just don't see how that happens.
Until we know more, it is unthinkable. Maybe it can be thinkable if the president says what the plan is.
Right now, though, we just have an abyss and nothing to fill it.