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s. 2049

s. 2049

Following up on my Penny Lobby post from earlier this week, I thought I’d tackle another coin-based issue: dollar coins.

For the past decade or so, the government has been trying to produce and popularize dollar coins. Efforts to introduce the currency, though, have been met with failure (much like the Susan B Anthony coin fiasco of the 70s):

The Obama administration has suspended production of the coins for mass circulation after the government racked up a $1.4 billion surplus of dollar coins. […]

•Over-ordering: During special “introductory periods” of new presidential coins, the Mint swallowed the shipping and handling costs for coins sent to banks, making it cheaper for banks to order them. A memo by U.S. Treasurer Rosie Rios last year estimated that 75% of all orders for coins came during those introductory periods, artificially inflating orders for new coins, even as banks were sending unwanted old coins back to the Federal Reserve…. Reports from the Federal Reserve to Congress show the central bank knew of the impending backlog as early as 2010. They estimated that 40% of dollar coins were returned by banks, prompting the Fed to propose building a $650,000 storage vault in Dallas and spend $3 million on armored cars to take the coins there.

Of course, politicians with little respect for history will not be deterred from introducing dollar coins. S. 2029, proposed in late January 2012, is trying to take another swing at the dollar coin:

Currency Optimization, Innovation, and National Savings Act – Requires the Board of Governors of the Federal Reserve System (Federal Reserve Board) to sequester all $1 coins bearing the design common to those $1 coins minted and issued from 1979-1981 and again in 1999. Allows the release of such sequestered coins to collectible coin dealers and countries that have adopted the U.S. dollar as their base unit of exchange. Directs the Federal Reserve Board to: (1) undertake efforts to improve, and remove barriers to, the circulation of all other $1 coins; and (2) work with the U.S. Mint, consumer groups, media outlets, and schools to publicize the Presidential $1 Coin Program. Declares it is U.S. policy that after consumers and retailers are comfortable using and able to obtain adequate supplies of $1 coins, such $1 coins should replace $1 Federal Reserve notes as the only $1 monetary unit issued and circulated by the Federal Reserve System.

I doubt it will pass, but it’s a good example of government doing the same thing over and over again and expecting different results.

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Comments

Susan B. Anthony dollar coin: the “Carter Quarter.”

The more interesting way of determining whether there is any real demand for dollar coins might be Ron Paul’s H.R. 1098. I just heard about it yesterday, as FreedomWorks is pushing it and I’m on their mailing list.

I vaguely recall every once in a while the feds arresting someone for making collectible coins that they think come too close to being an alternate currency. This would stop that.

But I guess it would also mean that if some private group thought there really was a market for dollar coins (say, vending machine companies), they could do the research themselves and make it. Being in the business of making things people actually use, they might be more successful.

I find it to be a fun way to save. Whenever I’m at a bank teller’s window I ask if they have any dollar coins, which they always do, and usually a variety them, and they’re usually quite eager to get rid of some. I buy $5 or $10 worth and throw them into coffee cans.

The only way the dollar coin will work is if they eliminate the dollar bill. And the first politician who advocates THAT will be tarred and feathered.

People are funny about their physical money. It’s more than just a means of exchange.

When I was a kid (1960s) a dollar was real money to me. When I was a college student, if I had an Andrew Jackson in my wallet I felt I had some real money on me. A $20 bill was security whereas $20 in change didn’t excite me.

But if we’re going to push coins instead of bills, go whole hog: not just dollar coins but $2 and $5 coins as well, and get the banks and vending industries to buy into them. But be sure to get the bills out of circulation or it will never work.

Canada has the ‘looney’ and the ‘double-looney’. We just need good nicknames for our new coins. And with Obama in office …

    I concur. The only way that the public will sufficiently buy-in to the dollar coin will be to withdraw the dollar bill from circulation simultaneously with implementation.

    I’m not sure why they would want to though. Producing a dollar coin has got to be more expensive than a dollar bill (although it will probably last longer). I suppose that there is something to be said for a coin having some inherent metal value. I also suppose that it’s harder to counterfeit, but why bother?

1. This sounded like the kind of bright idea Chuck Schumer would have.

It’s Tom Harkin. Close enough.

2. I haven’t thought through the merits, and I don’t know if the bill is driven by crony capitalists or by goo-goos. However, at a time when people feel extremely insecure about the future, it is not a good idea to meddle with a basic implement of their daily lives.

My purse is already too heavy with all the coins that collect in the bottom and I don’t need my pockets stuffed with these bulky coins……’nuff said 🙁

The thrill of the sound of clanging Eisenhower dollars falling into the tray of a Vegas dollar slot machine is not to be underestimated. Memories.

    G Joubert in reply to LukeHandCool. | April 13, 2012 at 1:20 pm

    I was born and raised in Vegas –1950s and 60s– and back then, before the Eisenhower dollar, the standard medium of exchange for the single dollar was either the Morgan Dollar or the Peace Dollar, and were much more common than paper dollars. Those were the days.

Politicians and bureaucrats ignore physics at their peril. Who wants to pack pounds of dollar coins around? Nobody.

So discontinue the penny and the nickle. Make a dollar coin smaller than the penny, but larger than the dime; then ten dollars worth of coins won’t be an overburden.

When it comes to having dollar coins foist upon us, I would just say, “Buck the trend!”

southcentralpa | April 13, 2012 at 2:13 pm

How much easier would using vending machines be if you could use dollar coins instead of trying to make tatty dollar bills work in the bill reader? Or, be able to use a 5 dollar bill in a vending machine and get back a few dollar coins instead of over 10 quarters?

Canada saved a fortune when they went to the “Looney”. Save money AND tell John Kerry to go pound sand (yes, supporters of the dollar bill are “crony capitalists”)? Sign me up!

    Anchovy in reply to southcentralpa. | April 13, 2012 at 3:43 pm

    You shouldn’t be eating food from vending machines anyway. You should only be eating fresh, locally grown arugula or caviar from fish taken from nearby streams that have been inspected by the EPA.

    More later, but now I have to jet off on a vacation. Staying at home and taking care of my two daughters is exhausting and I need a rest.

    Michelle

They need to come up with an alternative to the wallet in order for men to be able to carry the around easier. I don’t mind the coins but they are a impractical. Bring back the $20 gold piece and other denominations. The $20 gold coin would be more like a chip of gold in an otherwise lump of minimally valuable metal. Pretty pathetic really.

    stevewhitemd in reply to PaterNovem. | April 13, 2012 at 4:39 pm

    They need to come up with an alternative to the wallet in order for men to be able to carry the around easier.

    That’ll be the iPhone 6. It’ll have a digital wallet and the little radio frequency doodad that will let you charge stuff to your iTunes account by waving it in front of a gas pump or vending machine.

    So you can pay $500 for a device that will let you save on carrying dollar coins. Isn’t progress grand?

    It’s called a “man purse”. I used to have one until someone made a comment about me. He picked up his teeth with a broken arm.

I like dollar coins… but then, I’m atypical. I ride the bus to and from work (using the dollar coins), and the vending machines at work take them as well.

In our fiscally broke government…dollar coins actually make sense. It costs $.37 to produce a dollar bill that lasts an average of 3 years. It costs about $.07 to produce a dollar coin that lasts 30 years…

The only way to make coins viable is to phase out dollar bills. I support that fully. It’s time to cut costs where we can and if we can save $.30 on the production of each unit of currency…shouldn’t we do so?

Want to know where dollar coins are popular? In Ecuador. The official currency of that country is the US dollar. The problem is that they get very few singles down there. If you happen to come across one it will be very weathered and beaten up. So they use our dollar coins because they last longer. For coins under a dollar they accept US coins but also mint their own that are exchangeable. For example, you can trade four Ecuadorean quarters for a dollar coin. We can ship the surplus of dollar coins down to Ecuador in exchange for greenbacks. They’ll be happy about it I’m sure.

So why not just stop printing $1 notes? People might be unhappy, but what are they going to do about it? Nothing. Stop printing them, and start circulating the coins, and people will have no choice but to use them. I really don’t see the down side.

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