Boy, the word "hubris" doesn't even begin to describe this. And you thought the bravado surrounding the Iraq invasion was over the top.
Snow said the government is nowhere near reaching the international lending market's ability to absorb more federal debt, even with the annual government budget deficit near a record in dollar terms already. On the contrary, he said, bond traders will reward the administration for tackling the problem presented by a rising tide of retiring baby boomers who, by 2019, will be taking more out of Social Security than workers will be putting into it.When central banks are making 74% of all treasury purchases (as they have been over the last four months), Snow is basically saying that the official sector has an infinite appetite for US debt. Not only can the East Asians, Europeans and increasingly South Americans buy an infinite amount of debt forever, but they want to as well!
"They understand that it's a real cost, that it's there today, and that actions to bring that unfunded obligation down will improve the balance sheet of the United States," he said.
I can't see this as anything other than the Bush administration playing chicken with the Japanese and especially the Europeans. We dare you to not buy our debt. We just dare you!