Treasury brings back 7-year note to help deficit

[0:01] ..." a budget deficit expected to top a trillion dollars this year the Treasury Department is bringing back the seven year note and doubling the number of its thirty year bond auctions. Auctions for seven year notes will be done once a month starting this month. In addition 67 billion dollars will be auctioned next week in three year ten year and thirty year treasury securities. That's a record amount of a quarterly refunding in another record treasury says it will need to borrow nearly 500 billion dollars this quarter. WBZ's Mary Blake -- Carey Leahy -- treasury specialist an economist with Boston based decision economics what he makes of these moves."...

[0:41] ..." can do they have to pull out the stops. Bring back old treasury issues. Increase the size and frequency of existing issues in an effort to. Finance. -- but. Budget deficit this year which is in the top our approach -- trillion dollars in -- finance and -- going to be even larger -- are paying for the upfront costs of the financial market rescue plan that no other alternative you've got to raise a lot of money hopefully from abroad."...

[1:38] ..." the 57 year ten year -- in the near the treasury bonds which are thirty years and those have been increased his wealth to those of the choices they have between short term bills medium term notes. And longer term bonds and I hope the treasury and I think they are an issue a lot of bond take advantage of the fact that they're borrowing rates are extremely"...

[2:10] ..." with the limited success is this what's going to has at the magic formula. "...

[2:14] ..." Well I don't know -- is that the magic formula they'd really up backstop. Two of financing what they need. To do with this is really going to help the the average fell on the street what will help the average fell out on the street. It is fairly substantial and broad based combination of tax cut. Government spending -- states and localities and perhaps more importantly. Foreclosure relief to keep people in their homes and substances announcement is basically saying"...

[3:27] ..." a lot of money so we have to. Generate a lot of treasury debt."...

[0:00]" In an effort to grapple with a budget deficit expected to top a trillion dollars this year the Treasury Department is bringing back the seven year note and doubling the number of its thirty year bond auctions. Auctions for seven year notes will be done once a month starting this month. In addition 67 billion dollars will be auctioned next week in three year ten year and thirty year treasury securities. That's a record amount of a quarterly refunding in another record treasury says it will need to borrow nearly 500 billion dollars this quarter. WBZ's Mary Blake -- Carey Leahy -- treasury specialist an economist with Boston based decision economics what he makes of these moves."

[0:40]" This is about all they can do they have to pull out the stops. Bring back old treasury issues. Increase the size and frequency of existing issues in an effort to. Finance. -- but. Budget deficit this year which is in the top our approach -- trillion dollars in -- finance and -- going to be even larger -- are paying for the upfront costs of the financial market rescue plan that no other alternative you've got to raise a lot of money hopefully from abroad."

[1:16]" You -- change the distribution of the auctions but you're sort of stuck with. Regular and fairly predictable -- to make -- the -- is. Appropriately. Price so essentially there -- there -- weekly bills -- various security under a year. There -- monthly -- of what they -- notes whether -- the 57 year ten year -- in the near the treasury bonds which are thirty years and those have been increased his wealth to those of the choices they have between short term bills medium term notes. And longer term bonds and I hope the treasury and I think they are an issue a lot of bond take advantage of the fact that they're borrowing rates are extremely lows that there were -- to what the time yet the finance a lot of deficit spending this -- the year rates -- are -- rock bottom to go out and get them."

[2:07]" We have his bag of tricks they've been reaching into this bag of tricks for some time with the limited success is this what's going to has at the magic formula. "

[2:14]" Well I don't know -- is that the magic formula they'd really up backstop. Two of financing what they need. To do with this is really going to help the the average fell on the street what will help the average fell out on the street. It is fairly substantial and broad based combination of tax cut. Government spending -- states and localities and perhaps more importantly. Foreclosure relief to keep people in their homes and substances announcement is basically saying Howard going to pay for all."

[2:54]" They will eventually that tomorrow's. Problem at the moment right now you'd. Don't want to repeat the mistakes of the 1930s. And stand by and do nothing or in the case in 1930. Do something wrong might try to balance the budget or constrict the money supply what we're doing now flooding the world liquidity. And trying to lean against the punches from the recession. In an effort to. And some sense less than their below that you are doing the right thing in the announcement today at this thing well we're trying to do the right thing that's going to cost a lot of money so we have to. Generate a lot of treasury debt."