Yes he did. And it wasn’t taken out if context. Watch the video.
Well, it's a true statement, isn't it? There really won't be a default, because we always pay.
But to bandy it about...it's like saying, "I know real estate is a good investment because I can increase the value of my home by burning all the other houses on my street."
It's not the sort thing that should be said at all, for the likelihood of misunderstanding.
And to presume upon it...aloud...in public...eek.
That said, as I take it, he's stating it as a fact: look, default is what happens when your bank account is NSF. That doesn't happen in a fiat money regime. He also talked about the massive flow of money from abroad into treasuries late last week as being a confidence vote in US credit by the marketplace, and as any free-marketer knows, that's the vote that counts.
I'll assume he uttered a truism in a very provocative way with maybe just a hint of presumption. What's damaging isn't the remark so much as the spin it's going to get by US haters.