A billion dollar coins sitting around in vaults, with more being minted every day.

[randomness]

There have been a number of articles recently, like this one from NPR's Planet Money about the billion or so dollar coins that are being held in government vaults around the country. In the ones I've seen there's only oblique reference to the fact that the objections to withdrawing the dollar bill--which is just about the only proven way to make the transition from paper to coin happen--was blocked last time around by Senator Kennedy from Massachusetts and Senator Lott from Mississippi. Nicely bipartisan, that.

Kennedy objected because Crane & Co., the only source of the cotton-based paper for American paper money, did not want to lose the half of its currency paper business represented by dollar bills. Lott objected because the cotton that goes into that paper is from Mississippi.

That explains why the paper dollar is still around, but why is the Mint cranking out more dollar coins if there's no demand for the ones that exist? That is also because of legislators. Planet Money:

In 2005, Congress decided that a new series of dollar coins should be minted to engage the public. These coins would bear the likeness of every former president, starting with George Washington. There would be a new one every quarter. So, far, the Mint has produced coins through the 18th president, Ulysses S. Grant.

Members of Congress reasoned that a coin series that changed frequently and had educational appeal would make dollar coins more popular. The idea came from the successful program that put each of the 50 states on the backs of quarters.

But as the new presidential dollar coins rolled out, the greenback lost none of its dominance in Americans' hearts and wallets.

If the mandate to make presidential coins wasn't enough to generate a growing heap of unwanted coins, a political deal ensured that even more unwanted coins would be produced.

It was easier for the bill's sponsor, then-Rep. Mike Castle (R-DE), to move the presidential coin bill forward if it didn't displace other dollar coins honoring Sacagawea, the teenage Native American guide to Lewis and Clark.

The deal: The mint would be required to make a quota of Sacagawea coins. Currently, the law says 20 percent of dollar coins made must have Sacagawea on them.

So, there are now about 1.2 billion dollar-coin "assets" chilling in Federal Reserve vaults, unloved and bearing no interest. By the time the presidential coin series finishes, and there are coins honoring all past presidents, there could be 2 billion.

Several congressional leaders contacted by NPR declined to comment for this story.

My modest proposal? Give them all away. Every person in America would get four; seven if you keep handing them out until the presidential coin series ends. Warehousing problem solved. If no one wants to use them, so be it.

Then the Federal government doesn't incur the expense of keeping and guarding them for however many years it will take to get rid of them all, or worse yet, melt them back down. Which probably means money will be saved in the long term.

Comments

[ladybird97.livejournal.com]

So, living in a country where there are not only dollar coins, but two-dollar coins, I have to say that I don't mind them at all. Yes, they're heavy, and they weigh down my purse a bit, but for a lot of things, they're much more convenient than bills. Paying bus fare is the biggest one for me - instead of fiddling with trying to feed bills into the machine or hoarding quarters, I just drop in one or two coins. Ditto for parking meters. Plus, it's a pleasant surprise when you're out of bills and think 'oh, I'm broke because all I have is change' and then realize 'wait a sec, I've got three toonies, and that's real money!' :)

So, yeah, I'm a fan of the coins.

[digitalemur.livejournal.com]

Oooh, I love realizing I still have toonies, too! Also, the bimetallic thing still makes me really happy, as does the name.

Do you find that the larger coins keep you from carrying so much weight around in quarters? I tend to break bills just because I love the coins, because I'm only in Canada for short periods, but I'm wondering if for longer periods of use you find you're saving weight because you don't need the quarters as much.

[ladybird97.livejournal.com]

Yeah, they do, actually. It's much harder for me to accumulate laundry quarters than it was in the US!

Also, to play devil's advocate to myself, I've got a couple Canadian friends who don't like toonies - they think they're a pain, and too big, and not useful. So it may just be a factor of the novelty that I like them so much. But I really do find them useful!

[digitalemur.livejournal.com]

I've heard that too. I think I might have to be there for a while to find the toonie annoying. My trip to the maritimes this summer will be my longest trip yet. And I'll get to use euro, for like 18 hours!

[r-ness.livejournal.com]

Well, you can hand me all the toonies. I need a few more toonies in my life.