Everyone has had the experience of turning over a shiny new quarter or nickle and being surprised by the non-standard design on the back. Lots of people even have those maps of states that have little pockets for the quarter that bears their image. However, you may be surprised just how many "specialized coins" are worth far less than their face value, despite the collectable aspect. One such coin is the Chester A. Arthur dollar coin.
As many of you may have noticed, dollar coins (and President Arthur) just aren't that popular. As part of the attempt to budget spending, automatic production of the coin is being cut. According to Vice President Joe Biden, 40% of the Arthurs produced every year are simply returned to the Federal Reserve due to lack of demand. The only reason for so much production in the first place is because of a 2005 act of Congress that requires 70-80 million coins produced per deceased president. The discontinuing of the coin will result in 50 million dollars worth of saving per year.
Is this simply an example of increasingly conservative spending? Or does it reveal an excessive expenditure that should not have existed in the first place?
7 comments:
I think that there is something a bit silly in deciding how much currency is printed based on how many presidents are deceased. If we go back to the demand and supply idea, if there is not that much of a demand for such coins, then they should just stop printing it. Now, I'm not sure how much spending is actually put into printing these coins, but currently, it seems like wasteful spending.
I agree with Zhili, the idea that our currency (whether it be specialized coins or not) value is partially dictated by the need to produce 70-80 million coins per president is a terrible idea. I would like to know however, why the bill was passed in the first place.
I must agree with Zhili in that an act requiring that a certain number of coins be produced per deceased president seems like a horrendously inefficient use of taxpayer dollars. While dollar coins may hold novelty, we must remember that transporting dollar coins is hugely different and more cumbersome than transporting dollar bills. And as these Chester A. Arthur coins already cost 32 cents to make, continuing to incorporate dollar coins into our existing supply of fiat money seems wasteful and unnecessary. Dollar coins are not as easily slipped into a back pocket, shoe, or bra. Moreover, our perception of money may be to some extent a popularity contest; money featuring the great Abraham Lincoln, the man who led us through the Civil War, seems far more attractive than money featuring Chester A. Arthur, the man who enacted the Pendleton Civil Service Act. While the latter was a pretty snappy piece of legislation, comparing it to the painstaking reunion of the North and the South is like, well, comparing apples to oranges.
Thanks, Mr. Cain.
I think it's safe to say that all agree it's wise to lower the production of these dollar coins - however special they may be. This presidential $1 coin program of 2005 bears much resemblance to the 50 State Quarters program enacted in 1997. The latter has proved very successful - as many people (including myself) have garnered them as collectibles. I think the reason that this program outshines the presidential program rests on two points: firstly, people prefer using greenback dollars to dollar coins, whereas quarters are still coins regardless of whether there are specially minted pictures representing the 50 states; secondly, people are more familiar with the 50 states than with the presidents of the United States (I would certainly imagine that many more people can name all 50 states than can name all past presidents).
Coins last longer than dollar bills and so over time, the cost of creating money evens itself out. Bills are created with the expectation that they will circulate for 18 months while coins can circulate for 50+ years. If ignoring the inconvenience of carrying around a bunch of coins, it makes just as much sense, from a cost standpoint, to produce coin money as paper money. Then again, the impracticality of coins makes this bill a little silly and unnecessary.
I have to disagree with sam because of his logic. If bills are printed with a circulation expectancy that much less than that of coins, paper money would be obsolete. However, their continues to be paper money in circulation disprooving sam's logic. I found this post very interesting since it is a perfect example of how difficult it is to repeal a law.
The same is true for the penny. It's literally useless now (how many times do you use pennies except to toss back into tips?) and the copper used is worth more than the 0.01 it represents. The post 1982 pennies are now made but with only %5 copper. Currently it costs the US Mint $0.018 to make $0.01. Several countries abolished their one cent coin by rounding prices to the nearest 5 cents.
Considering that the penny already should be abolished, This $1 coin is useless if no one is going to use it. So it should be discontinued if it is just dead weight.
Paper money and coinage is produced to make transactions easier. If no one is using them, why produce them? Basic rules of supply and demand applies and should be followed.
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