The Fed’s $1 Billion Stash of Unwanted Coins

 

(Hemera)

The folks over at NPR’s Planet Money have a great piece today on the stash of unused dollar coins that’s piling up at the Federal Reserve. Back in 2005, Congress passed a law ordering the Fed to mint a series of dollar coins honoring the presidents. The plan was to wean Americans off paper bills. It hasn’t exactly worked. There are currently about 1.2 billion dollar coins sitting unused in Federal Reserve vaults. The program has cost $300 million so far, and is scheduled to run through 2016.

Leave A Comment

Comments are moderated and generally will be posted if they are on-topic and not abusive.

 

COMMENTS: 24

View All Comments »
  1. Doctor Gonzo says:

    The American public won’t be “weaned” off dollar bills. Congress simply needs to pass a law that eliminates them. No other industrialized country has a paper bill with as little purchasing power as the dollar. It’s time for dollar bills to go.

    Also, eliminate the penny while you are at it.

    Well-loved. Like or Dislike: Thumb up 51 Thumb down 11
  2. John Davidson says:

    As a Canadian I recall the truth of another commentator. We were very reluctant to give up our $1 bill which was also repeated when forced to give up our $2 bill. Now I happily get rid of bills when shopping so that I have coins for parking meters and vending machines. The costs of paper bills is a small component of your deficit, but will turn out to be relatively painless sacrifice.

    Well-loved. Like or Dislike: Thumb up 14 Thumb down 5
  3. Duncan says:

    Does that mean that by using the coins we are making a cost free donation to the Government? It costs us nothing to ask for a coin instead of a bill when we go to the bank, and every new coin that goes into circulation nets the US government ~70 cents.

    Thumb up 4 Thumb down 3
  4. Marcus Kalka says:

    They don’t call it the “greenback” for nothing!

    Thumb up 1 Thumb down 4
  5. XIAN says:

    The cost of the coin is much higher than the cost of printing bills, granted the coins last longer, or we could switch to a more durable bill material, Austrailia used a plastic material that has double the life of our standard bill.
    If we’re going to get rid of the penny and dollar let’s go for the gusto and get rid of all physical money, use the Mint money to establish a central merchant system, provide people with a EBT card and cellular reader for transactions. This would destroy all blackmarket transactions after three to five years (the transition time for cash to EBT). Once all established on the EBT system. Then Government knows how much each person makes and spends, thus know how much taxes they should be paying.
    Is that too big brother/last days/sign of the beast for everybody out there?

    Hot debate. What do you think? Thumb up 9 Thumb down 12
    • John B says:

      Is that too big brother/last days/sign of the beast for everybody out there?

      Yes.

      And the claim that it will end illegal (blackmarket) transactions?

      No way.

      Well-loved. Like or Dislike: Thumb up 11 Thumb down 4
    • Joshua Northey says:

      I am actually a huge fan of this. Not sure why people are so against it. It would be much more efficient in a wide variety of ways. To put it another way, if you were building a colony/society from scratch that was using its own monetary system I cannot imagine you would use a physical medium to record currency.

      Oh well many large institutional changes take a few decades or even a century longer than they should.

      Thumb up 4 Thumb down 7
    • anonymous says:

      This reminds me of “The Handmaid’s Tale”. And then one day, all the cards linked to an “F” instead of an “M” stopped working. Not that I’m paranoid or anything…

      Thumb up 1 Thumb down 0
    • Explodicle says:

      I don’t think people would want to use the USD if this were to happen. Americans might demand physical currency and use EUR/CAD, or make the switch but use a better electronic currency like Bitcoin.

      Thumb up 2 Thumb down 1
  6. Enter your name says:

    I actually like the dollar coins, because they are extremely handy for bus fare and other vending machine situations. They drop in, with no fussing about whether the paper bill is perfectly flat.

    They’re no more hassle than a quarter to carry around, and they’re easy to store in the house. (I keep a couple of skinny old prescription-drug bottles for it: one stack of about $20 fits very neatly.)

    But they’re hard to get. I usually have to make a special trip to the bank, during lobby hours, to get them. I do it a couple of times a year, but I wish that our ATMs (like some) would dispense them. It would be particularly handy for people who only want to withdraw a few dollars, rather than always in increments of $20.

    Well-loved. Like or Dislike: Thumb up 9 Thumb down 1
  7. Jason says:

    Is there a reason they don’t just stop printing dollar bills? Or at least significantly reduce the quantity?

    Well-loved. Like or Dislike: Thumb up 6 Thumb down 1
  8. Mike B says:

    I don’t even consider those things to be actual currency. To support this point I call them Universal Transit and Parking Tokens or UTPTs and say that they are goods for $1 worth of Transit or Parking all over the country. I guess one could also consider them a form of education on historical US Presidents where children and collectors are encouraged to collect the whole set.

    Speaking of collecting before one going bitching about the cost of the program be aware that the aggregate affect of collectors taking money out of circulation is reported by the Fed or whomever manages such things as profit to the Treasury known as Seigniorage. The 50 State Quarter programme actually returned a net profit of $6.3 billion. With each of the Presidential Dollars worth 4 times the value of a quarter and coin collectors the world over forced by their OCD to “collect ‘em all” (all including different minting locations) the programme will probably return well more than its $300 million cost.

    http://en.wikipedia.org/wiki/Senorage

    Thumb up 3 Thumb down 0