If you have an actual life and important things to do, you probably haven’t been paying attention to the latest debt-ceiling theater now going on in Congress. Congress is indeed at it again, however, and the leadership from the GOP and the Democrats are fighting over how federal tax dollars will be spent over the next year. Until an agreement is reached, the GOP leadership is refusing to sign off on any increase to the debt ceiling which permits the federal government to add to its 30-trillion-plus debt and keep the federal government humming using its usual debt-financed tricks.
In an effort to get the debt-ceiling increase sailing through without any opposition, the Biden administration in recent years has repeatedly claimed that the United States government has never ever defaulted. Janet Yellen has made this claim several times. For example, in a 2021 column for the Wall Street Journal, she repeatedly claims the US has never defaulted. “The US has always paid its bills on time,” she insists, and then repeats the claim in the next paragraph: “The US has never defaulted. Not once.”
Biden’s handlers are still at it. On Tuesday, the Biden administration tweeted that
America is not a deadbeat nation. ... We have never, ever failed to pay our debt. But MAGA Republicans are engaged in reckless hostage-taking by threatening to force America into default. It’s dangerous and wrong
America is not a deadbeat nation.
— Joe Biden (@JoeBiden) May 3, 2023
We have never, ever failed to pay our debt. But MAGA Republicans are engaged in reckless hostage-taking by threatening to force America into default. It’s dangerous and wrong.
This is a lie, whether Yellen says it or Biden says it. Here at mises.org, we’ve published several articles on this topic. Here are two of them:
- Link: A Short History of US Credit Defaults by John S. Chamberlain (July 2011)
- link: Yes, the US Government Has Defaulted Before by Ryan McMaken (February 2023)
These articles outline how the US government in the early years of the new federal government, and then again during the US Civil War, when the government refused to make good on its promises to repay its notes in gold. Further defaults followed, with the largest being the 1934 default on liberty bonds. The US had explicitly promised to pay back its debts in gold. It then refused to do so. Fortunately, the word is getting out. Shortly after the Biden administration posted its tweet lying about US defaults, Twitter users used the “community notes” feature to add additional context to the post.
As you can see, the added context contains a link to Chamberlain’s article: This has produced tens of thousands of visitors to the article.
Moreover, another one of the articles posted is written by our own Senior Fellow Alex Pollock, and published in The Hill. Pollock adds two additional defaults: the time the US refused to make good on its silver certificates in 1968, and when Nixon closed the gold window in 1971, refusing to make good on its gold obligations under the Bretton Woods agreement.
These are all excellent examples of how the US cheats its creditors, and it’s time for agents of the regime to stop pretending that the US government is not a “deadbeat” government.
