Treasury to auction debt for the Federal Reserve (New program)

[Blue Diadem]

In order to help fund the central bank's recent deals, the Treasury Department will auction $40 billion of debt on Wednesday.

WASHINGTON (AP) -- The Treasury Department will begin selling bonds for the Federal Reserve in an effort to help the central bank deal with unprecedented borrowing needs resulting from the current credit crisis.

Treasury officials said Wednesday that the new program would be conducted in the same way that the government sells billions of dollars of regular Treasury securities each week to finance the government's budget deficits.

Those deficits have been soaring because of the current economic slump, with this year's deficit expected to hit $400 billion, more than double last year's $161.5 billion. The administration is projecting that the deficit for the 2009 budget year, which begins Oct. 1, will soar to an all-time high of $482 billion.

The country's economic troubles have reduced tax revenues and increased government spending including the cost of the $168 billion economic stimulus effort Congress passed earlier this year to give the economy a boost.

http://money.cnn.com/2008/09/17/news/economy/treasury_fed.ap/index.htm

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Hmm..didn't McCain say our fundamentals of our economy were strong? I don't understand all the economics but this sounds like we're really searching for money.

[midnight]

1. This new program indicates that our "fundamentals" are

failing us.

[MadHound]

2. Hmm, sounds almost like a going out of business sale.

Liquidating American assets. My question is, with our economy in the toilet, who would want to buy all that debt?