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

[sarakate.livejournal.com]

I agree with this, and I think the presidential series is likely to backfire for this reason -- the novelty factor will make them go into collections, not into circulation. I know people who've never collected a thing in their lives who collected the state quarters (my dad is one of these; I was amused at his chagrin when he said he only needed two-states-I-forget-now, and I said, "Oh, of which mint?" and he said, "WHAT?" and then I pointed out the mint marks and he realized he was about 2/3 done with the Denver series and after mining his pile of "extras" still only about half done with the Philadelphia series).

I like the Sacagawea dollars -- I think the size, color, and texture adequately distinguish them from a quarter -- but the efforts to distribute them were abysmal; even when the distribution was in full swing it was rare to get them as change (except at the post office! I used to regularly buy stamps at the stamp machine, a few at a time using a much larger bill than needed, because the change was all coins, including dollar coins, but alas, they did away with the stamp machines in favor of the APS, which only takes credit cards) and not particularly easy to get them even from banks on request. Now I make a point of requesting them a week in advance at the bank before I head to Ren Faire, as coinage is much more authentic in feel than bills. :)

[r-ness.livejournal.com]

I was amused at his chagrin when he said he only needed two-states-I-forget-now, and I said, "Oh, of which mint?" and he said, "WHAT?" and then I pointed out the mint marks and he realized he was about 2/3 done with the Denver series and after mining his pile of "extras" still only about half done with the Philadelphia series

Ha ha!

I suppose it would be too cruel to tell him about the proof quarters from San Francisco.

Now I make a point of requesting them a week in advance at the bank before I head to Ren Faire, as coinage is much more authentic in feel than bills. :)

I like having some dollar coins and half dollars handy myself so I'll occasionally go in to the bank and ask for them. Around here they're only too eager to get rid of them. $2 bills, too. But I like spending what I think of as orphaned money.

There's a lunch place up in Northeastern CT that hands out half dollars in change, which always confuses newcomers.

[digitalemur.livejournal.com]

Yeah, people who don't otherwise collect stuff do those quarters. Someone at the coffee shop at work was helping her mom collect them, and I can remember loading up on P state quarters before a visit to friends in California who were heavy on D quarters for obvious reasons.