Wednesday, May 04, 2005

Treasury Blinks.

The treasury department announced it is considering issuing 30 year treasury bonds again for the first time since 2001.

Explains the undersecretary in charge of financial markets, who may be the number two at the department these days given all of the unfilled positions at treasury:

``We are doing this because times have changed, and our debt portfolio has changed,'' said Timothy Bitsberger, assistant secretary for financial markets, in a press conference. ``We believe now we have the flexibility to issue 30-year bonds and maintain liquid issuance in all of our other securities.''

"Flexibility" ? I guess the Bush administration is finally acknowledging that they've run up a lot of short term debt, enough to allow considerable "flexibility" in issuing debt of various stripes and denominations going forward. Just how much short term debt has the treasury racked up since 2001? As the undersecretary explains,

``This is a decision independent of what our deficits are,'' Bitsberger said.

In other words, plenty . We'll be rolling debt over for years, even if we somehow manage to run surplusses again any time soon. Or, put another way, Alan Greenspan's 2001 testimony is now well into the conditional fine print part about how any tax cuts enacted to assure that the treasury doesn't run out of marketable debt ought to include a clawback just in case there turns out to be more than enough marketable debt so that Social Security surplusses might be used to pay down debt.

We no longer have to worry about what the US Treasury might have to do with the Social Security surplusses. There's plenty of marketable treasury debt available to retire. Hey, doesn't that wipe out one of the biggest rationalizations for putting the "surplusses" into private hands?


<< Home

This page is powered by Blogger. Isn't yours?