Dollar Coins
The government wants to switch to dollar coins. You know… the gold dollar. Ok, makes sense. Coins last a lot longer than paper money and for the one dollar bill it’s cheaper to make it into a coin. Fine. In fact, switching from paper to coin could save as much as $700 Million a year. They’ve been trying to make this change for as long as I can remember. They keep coming out with new dollar coins to get everyone interested. Eh.. I don’t think the problem is that the dollar coin isn’t pretty enough.
Here’s a solution! Hey government are you listening? (No.) Just stop making paper dollars. There I said it. But moving on…
In an effort to get people to use coin dollars instead of paper dollars they are letting people buy them from the mint directly. People started buying thousands upon thousands of these dollars on their credit cards to get the points. Then they would just deposit their dollar coins in the bank and pay off their credit cards. Free reward points on their credit cards for them and shipping costs for hundreds of thousands of heavy gold coins for the taxpayer. Super.
But real the idiocy of the government gold coin debacle doesn’t begin or end there. In 2007, Congress decided to make dollar coins with every single president on them. Kind of like what they did with the state quarters. Well, I guess that’s ok. The problem lies in that no one wants to use the dollar coins. So the mint keeps making all these different dollar coins (and paper dollars as well to meet actual demand) but since these coins never make it into circulation they go into storage. Yeah, there are buildings full of unused, unwanted dollar coins.
They make 2 million dollar coins a day. Each coin costs 32 cents to produce. So $640,000 per day is spent making dollar coins no one wants. But that’s just to make them. They also need to transport and store them. There are currently $1.2 billion in dollar coins in storage. That’s enough to last us for 10 years. But do they stop minting them? No they do not. By the time the Presidental program is finished they expect to have 2 billion coins in storage.
To accomodate all the storage space they will need they are building a brand new facility in Texas to hold more coins. This building is expected to cost $650,000 to build. My question is how much will the facility cost to run? How much will it cost to get the coins from the mint to storage? Why?
Ashley
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Comments
There’s no logical rationality in a lot of what Governments do. I honestly don’t understand the great aversion to transitioning to coins. If we’re all about lowering the cost of Government then surely we should get onbaord. Like you suggest, they need to just stop printing 1 dollar bills.
Yeah, I think the only way we are going to start using dollar coins is if they just stop printing the paper bills. They could make them light up and dance and we won’t be interested.
On the same note, why do they keep printing pennies? I’m tired of items priced at $X.99. What a waste!
Yea, this one makes no sense to me, either. American clearly don’t like the coins. I actually don’t mind using 1 and 2 Euro coins in Europe, but I don’t like dollar coins here, probably because most people don’t use them.
Planet Money had a great podcast on this whole thing. It’s actually a law enacted by Congress requiring so many coins to be minted. Crazy stuff.
Maybe we could get Klout to award influence points for anyone that uses the dollar coins. It seems some people will do almost anything to improve their Klout score and win Klout Perks (Kind of like the old S&H Green Stamps without the real swag).
The way postage rates have been rising maybe we could glue a coin to mail a letter (for those old enough to remember snail mail).
Australia, Britain, and Canada have successfully introduced coins in similar denominations but only after phasing out paper notes. It is obvious that the only way for dollar coins to be successful here is to phase out dollar coins but that isn’t likely to happen soon. Some people would probably call it “dollar coin socialism” but maybe they eventually will see the light.
Maybe the Vending Machine Association of America (I made that up) is upset because they would need to spend their own coins to update the machinery so customers can use dollar coins to purchase unhealthy snacks and soft drinks?
I do despise the USPS for spitting out ten pounds of Susan B’s as my change when all I have is a twenty dollar bill with me to buy a few stamps. But I don’t mind carrying around a bunch of Euro coins. I think we just need a mindset change – phase out those dollar bills.
Yes, it’s a crazy situation. Stopping printing paper dollar bills (and pennies!) would help a lot. It must be a mindset thing as I don’t mind the 2 dollar coins and the loonies in Canada or the Euro coins. How do we get so set in our ways?!
As far as government insanity is concerned, that’s not the half of it (literally): by law, the Mint is required to produce one Sacagawea coin for every new presidential coin. So, it makes twice as many unwanted coins. Still, our vending machine at work will dispense them as change for a five dollar bill. I keep some in the desk drawer for that purpose, and for occasional snacks at convenience stores, where they frequently get a what-is-this reaction.
I don’t think I’ve ever seen one of the newer ones so I can agree that they’re definitely not popular. I remember the ‘Susies’ a while back and the problem with those is they were pretty much the same circumference as a quarter, so if you weren’t careful you could screw yourself out of seventy five cents.