News Summary: US has stiffed creditors before

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Associated Press

Posted on October 14, 2013 at 11:03 AM

DEADBEAT PAST: Despite claims that the United States has never defaulted, the record's not that clean. America has stiffed creditors on at least two occasions.

WAR AND PAPERWORK: 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.

FORGOTTEN SLIPS: These lapses, little noted outside financial circles in their day, are nearly forgotten now.

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