Jewish World Review
Dec. 15, 2011
/ 19 Kislev, 5772
The U.S. government is cashing in its chips, literally
The U.S. government is cashing in its chips, literally. It is giving up on its repeated efforts to convince the spending public to use a dollar coin.
Dollar coins save the government money in the long run because they last so much longer than the paper dollar, but Americans aren't having any of it.
The White House announced Tuesday that it is stopping almost all production of metal dollars, which consist of the presidential coins and a smaller number of Native American coins, which still bear the likeness of Sacagawea.
That means the presidential-coin series, intended to honor each president with his own coin, will stop with James Garfield, the 20th president.
"And, as it will shock you all," said Vice President Joe Biden in announcing the curtailment of the program, "the call for Chester A. Arthur coins is not there."
A fine way to treat a chief executive who enacted significant civil-service reforms, revitalized the U.S. Navy and was criticized on leaving office for accumulating large budget surpluses. He was, however, a Republican and perhaps that factored into the Obama administration's thinking.
The decision to effectively eliminate the dollar coin was announced at the conclusion of a White House meeting on combating government waste. Pulling the plug on the coin will save taxpayers $50 million a year, which, The Wall Street Journal acidly points out, is "about 15 minutes' worth of the federal deficit."
The Mint will continue producing enough presidential and Native American coins to meet the needs of collectors, which, judging from demand to date, isn't very great.
The Mint produced between 70 million and 80 million coins per president, but about 1.4 billion were returned to the Federal Reserve, which was beginning to have problems storing them all. And, said Treasury Secretary Timothy Geithner, "That costs money." Freeing up storage space at the Fed will undoubtedly be another significant saving to the taxpayer.
The 1.4 billion coins on hand are believed to be enough to meet demand for a decade. Who would believe it in this country? A lack of demand for money.
The United States has had a dollar coin since 1794. Mostly they were silver, but between 1849 and 1889 they were gold. The dollar coins were popular until the '20s and '30s, until the federal government became increasingly reluctant to part with the silver and gold to mint them.
The last significant dollar coin, from 1971 to 1978, was the Eisenhower dollar, which had the moon landing on the tails side, except for the bicentennial year, when it was replaced by the Liberty Bell.
Congress tried again with the Susan B. Anthony, which lasted from 1979 to 1981 and was revived for a year in 1999. The public complained that it was too close to the quarter in size.
From 2000 to 2008, the Mint produced the Sacagawea, a handsome gold-colored coin featuring the woman who accompanied Lewis and Clark on their expedition. Then the Sacagawea coin became the Native American coin, with the same front but a different back.
In 2005, Congress ordered the Mint to produce dollar coins with the likenesses of the U.S. presidents, four each year between 2007 and 2016. As we've seen, we've only gotten as far as Garfield.
Backstage, the dollar coin has been the subject of intense politicking between the vending-machine lobby and the congressional delegation from Massachusetts, where the company that provides the paper for our currency is based.
The United States is the only major country whose basic unit of currency is not a coin. The Europeans have 1- and 2-euro coins, plus 1-, 2-, 5-, 10-, 20- and 50-eurocent coins.
It is generally agreed that the only way a dollar coin will be accepted is to phase out the paper bill it is replacing. The Canadians did that starting in 1987 when they introduced the $1 loonie. But they're made of sterner stuff up north.
Or maybe Americans are just funny about their money. After all, we insist on producing pennies, even though it costs more to make the coin than it's worth, and when we get them we don't spend them.
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