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

[redbird]

A billion dollars, and people don't even know it's there. Adrian is tutoring a grade-school student in math, and wanted to use coins for decimals. She asked if I had any loonies left; I said I wasn't sure, but that she could just go to the bank and ask for American dollar coins. She'd forgotten those are still out there, perhaps because the only places they tend to be put into circulation are as change from post office and subway vending machines.

[plumtreeblossom.livejournal.com]

I don't use dollar coins because they're a pain to carry around. I, like most people (read, women) who use a purse, don't carry coins in my pants pocket. Coins go in a coin zip that is part of my wallet, which rides in my purse. Ergo, I don't have room for very many coins, especially not large and heavy ones. I've watched numerous dollar coins fail -- the Susan B, Sacagawea, the gold George -- and I tbelieve it was because of a presumption that everyone carries their coins in their pants pockets. True for many men. Not so for many women, methinks. I prefer paper dollars that fold flat in my wallet.

[mizkit.livejournal.com]

If the bloody government wants people to use dollar coins they need to start taking dollar bills in at the banks and not giving them out again.

"Oh no!" say all the businesses. "The expense of replacing the cash registers!" Evidently it would come as a great shock to them that dollar coins will *also* fit into the dollar slots in a cash registers. Just not in a stack. But somehow they've gotten by all these decades with pennies, nickels, dimes and quarters that don't stack in the register, so I bet they could manage with dollars.

It was weird and annoying at first, over here, to have dollar (euro) coins (and 2 euro!), but I adapted very fast and now it's annoying to have that many more bills in my pocket (because unlike plumtree up above, I don't carry a purse unless I happen to be wearing something with no pockets :)).

Also, the change jar fills up really fast with big money when you're throwing dollars in at the end of the day. :)

[cerridwynn.livejournal.com]

I'm not sure i've ever understood the benefit of dollar coins over dollar bills. They're heavier and take up more space! Are they somehow cheaper to make? I'd guess they're more expensive!

Plus I'm more likely to lose coins in the bottom of my purse (or in my couch or under my bed or under the seats in my car... etc...). They don't feel as much like real money so i'm less likely to count/save them. Or is that the point -- will people spend dollars more freely if they're in coins rather than in bills?

Or is it really all about vending machines?

[gee-tar.livejournal.com]

There's a theory I heard once (I'm trying to track down the name, but my Google-fu is weak today) that it's because the coins are actually desirable that they aren't used. That is, they are considered rare so people like to keep them as souvenirs and take them out of circulation, while getting rid of their common dollar bills since they're a dime a dozen (er, or something like that).

Of course, the solution to this is the same: take out the dollar bills so there isn't an alternative currency pass along.

[digitalemur.livejournal.com]

As much as I love wheresgeorge.com, I would be so happy to get rid of the dollar bill, and I just don't get dollar coins now that I don't take NJTransit. I wish the US dollar coin was lighter, but I also wish we had a $2 coin because they're freakin handy. It's a little awkward to adjust to more and heavier coinage in my pockets but I still love to use higher value coins.

Now I'm getting excited to go to Canada in a month....

[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.

[nihilistic-kid.livejournal.com]

I'll always remember the time I went to a grocery store and tried to pay for my one little item with two one-dollar coins (Sacs) and the numbskull at the register looked at them suspiciously and said, "I don't think we take those." I was annoyed enough to not even argue; I just said, "Get your manager here right now."

She came over—and she was all of one year older than the kiddie cashier—and looked at my coins and frowned and said, "We do take those. We have to; some people consider them real money."

[contrariety.livejournal.com]

I will NEVER understand why the government thinks putting historically significant or pretty pictures on coins will make it easier for the public to accept them. In my experience, it merely increases the perception of them as a novelty play item. If they really want people to treat dollar coins as money, they should make them very Serious and Boring, which is the way proper American money ought to look anyway. (Peach-colored $20s, feh.)

But then, I hate large-denomination coins. Every time I go to Europe I end up weighed down by pocketfuls of them. Using currency should not require me to carry a coin-pouch, says I. :)

[karakara98.livejournal.com]

My solution to the problem? Get rid of pennies and dollar bills at the same time. That way, everything in the coin drawer at the register moves one slot left, and there's a place for dollar coins. I think the biggest reason people don't use dollar coins is because stores don't hand them out as change, and I think the biggest obstacle is operational.

[achinhibitor.livejournal.com]

Kennedy's dead and Lott isn't in the Senate any more...