For John, BLUF: This historic information notwithstanding, a default on our debt would be a bad idea, causing problems in the financial realm and in the international (informational) realm. Nothing to see here; just move along.
From The Hill, by Opinion Contributor Alex J Pollock, 10/07/21 12:01 PM ET.
Here is the lede plus two:
Every time the U.S. government’s debt gets close to the debt ceiling, and people start worrying about a possible default, the Treasury Department, under either party, says the same thing: “The U.S. government has never defaulted on its debt!” Every time, this claim is false.This is pretty straight forward, although the "types" of defaults are different to some degree. However, a default is a default, a broken promise.Now Treasury Secretary Yellen has joined the unfailing chorus, writing that “The U.S. has always paid its bills on time” and “The U.S. has never defaulted. Not once,” and telling the Senate Banking Committee that if Congress does not raise the debt ceiling, “America would default for the first time in history.”
This is all simply wrong. If the United States government did default now, it would be the fifth time, not the first. There have been four explicit defaults on its debt before. These were:
- The default on the U.S. government’s demand notes in early 1862, caused by the Treasury’s financial difficulties trying to pay for the Civil War.
- The overt default by the U.S. government on its gold bonds in 1933.
- The U.S. government default in 1968 by refusing to honor its explicit promise to redeem its silver certificate paper dollars for silver dollars.
- The 1971 breaking of the U.S. government’s commitment to redeem dollars held by foreign governments for gold under the Bretton Woods Agreement.
If you thought the dateline was odd, I agree. My assumption is that this is an update of an older article, not properly reviewed by the editors.
Hat tip to Ann Althouse.
Regards — Cliff
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