The Lying US Treasury: Must Fire Geithner Now, Must Fire Geithner Now

The US Treasury Department has once again been caught lying to the American people. The Department has thrown in the towel of financial sober rectitude (forget that) and jumped on the Obama re-election bandwagon. Why do I say this? Let's take a look at the Treasury's financial reporting.

On April 30 the Treasury published its latest debt funding needs projection. It was a lie, and they knew it, but nevertheless published it with a straight face.

What was the lie? On April 30 the Treasury projected tax revenues that it knew were a lie. For example, it was well known that as US workers were making less as increasingly more permanent jobs were being converted into temp jobs. The result of course was lower wages and less withheld tax and less tax revenue to the Treasury. This was obvious, evident, and deliberately ignored and lied about on April 30.

The lie was outed yesterday, when Treasury announced that it needed, surprise!, to borrow $12 Billion more in the quarter than  originally projected. How big a lie was it? Well, the Treasury will issue $276 Billion in net marketable debt in the quarter, a miss of nearly 5% on a quarterly basis.

The $12 Billion debt increase is due primarily to lower tax receipts (big surprise!), higher outlays, redemptions of portfolio holdings by the Federal Reserve System, and higher issuances of State and Local Government securities. So if only it wasn't for that pesky lack of revenue and excess spending, which everyone knew about but ignored, the projected lending would have, zounds!, actually been accurate. How about that?

So as a result, instead of needing $253 billion in fiscal Q4, the US will need $272 billion, after having a $5 greater financing need in fiscal Q3, also expected in calendar Q1.

In calendar Q4, the Treasury will need to issue $331 billion in debt, 21% more than in calendar Q3, and 17% more than in calendar Q4 of 2011. As Bob Dylan used to say, (and this is an actual quote, unlike what you may read in David Remnick's New Yorker rag): "The executioners face is always well hidden".

The upshot of all this is to document how the United States Department of the Treasury has been totally politicized, in that it consistently makes rosy projections which it announces for campaign purposes, and then later on, quietly, as mandaded by law, it finally supplies the real numbers, which are always egregiously over the top of the projected numbers. Always.

The sad and de-emphasized (for political reasons) fact is that calendar 2012 will see a 10% increase in total debt, while total US GDP is expected to rise by just under 2% for the full year.

So let's throw the bums out. Fire Geithner now.