The error was in basic economics and is telling. It tells us that the Treasury still clings to pure market theory. This says that people are rational and perfectly predict the consequences of the future in their current behaviour.
No, if people could perfectly predict then Keynesian stimulus would not work because Ricardian Equivalence (no Professor, go and look it up, you’ll learn something that way). That Ricardian Equivalence only partially works some of the time means that we don’t think that people do perfectly predict.
And that’s not what we mean by rational anyway. All we do mean is consistent. And that really is explained in he entry level text books. You should try reading one one day.