From Kelly Thesier’s latest mailbag on MLB.com:

…Smith has acknowledged the team is pretty well extended in terms of its budget.

There are two ways to look at this.  Either A) it’s true, or B) it isn’t.  But that’s kind of obvious, isn’t it?  Personally, I don’t think there’s a scenario where the statement actually is true…which means it’s where you go from here that makes it interesting.  I mean, why would Bill Smith say the Twins are done in terms of payroll if it wasn’t true?

Answer:  Posturing

Of course, there are a lot of ways to interpret that "posturing".  Maybe there’s just nothing left on the free agent market that seems like a good fit.  Or maybe Smith is trying to command baseball’s public perception of the organization for the purposes of leverage in some future trade negotiation.  Or perhaps the front office is simply happy with how things currently sit, and need to put a halt to off-season activity now so that if they do need to add a piece or two during the season they’ll be able to.

Payroll, in Major League Baseball, is a very fluid concept.  The Twins often cite it as "a function of revenue", and I have no doubt that it is.  But as the organization has proven time (Orlando Hudson) and time (Brian Fuentes) and time again (Orlando Cabrera), if they are convinced the right piece is there then ownership will allow them to move on it.

So, perhaps more accurately, in a certain context it’s actually true.  With an asterisk, "for now* it’s true".