CLAIMS US NEVER DEFAULTED ON DEBT FALL SHORTSo President Obama says the U.S. has never defaulted on its debt, he's either lying or:
You hear the same proud claim every time Washington wrestles with the debt limit: The United States has never defaulted. But the record's not that clean. America has stiffed creditors on at least two occasions.
Once, the young nation had a dramatic excuse: The Treasury was empty, the White House and Capitol were charred ruins, even the troops fighting the War of 1812 weren't getting paid.
A second time, in 1979, was a back-office glitch that ended up costing taxpayers billions of dollars. The Treasury Department blamed it on a crush of paperwork partly caused by lawmakers who — this will sound familiar — bickered too long before raising the nation's debt limit.
"He doesn't know his history," [Historian Don] Hickey said of the president. "It's that simple."Ouch! But while the language around the default claim may sometimes be sloppy, AP (to its credit) notes that the essential point of the claim is actually correct:
And the narrow lapses of the past don't compare with the kind of turmoil Lew predicts would occur these days if Treasury couldn't borrow enough money to pay what it owes to all sorts of people, from overseas bondholders to retirees on Social Security.In other words, when President Obama and members of his administration say the chaos that would result from breaching the debt limit would be unprecedented, they are right. Or, as Politifact would say, Pants on Fire.