Is it normal for people to lie about their success?

I work with a guy who has told some tall tales; he has claimed to work for the government before, and that he has created some cutting edge work in modern spam software and some other coding bullshit. He claims that he had his eye knocked out by the Russian mafia, but that they were able to put it back in. He claims to have done top secret work for the government, that he is close friends with Colin Powell, that he once played baseball professionally, that there is a building at Georgia Tech named after him (there isn't) and that he can safely retire right now and be set for life, but that his wife makes him work so that his kids may have some semblance of a 'normal' life or whatever. He has claimed to have 'survivor's guilt' and PTSD from successfully avoiding getting on the plane that terrorists crashed into the Twin Towers, and he drinks 2 liters of Mountain Dew everyday (I know this is true, I see him doing it) but that according to doctors, this middle-aged man has "the heart of a 25-year-old Olympic athlete." He is married and has two kids, this is true. He owns his own house in the suburbs and everything. Why does he make up these stories?

We work in a small, public library, btw - we're not in D.C. or anything, this is middle-of-nowhere bullshit land.