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Keynesian Minting

in down is the new up

via Greg Mankiw, via NPR:

On today’s Planet Money, we visit an underground vault that’s full of money nobody wants.

The money — bags and bags of dollar coins — is the result of a 2005 law that requires the U.S. Mint to print a series of coins bearing the likeness of each U.S. president.

The problem is, people don’t really like dollar coins. And there aren’t enough people who are fired up about, say, Rutherford B. Hayes, to make much of a difference.

So more than 1 billion dollar coins are now sitting, unwanted, in Federal Reserve vaults around the country. By the time the program wraps up in 2016, the Fed will be sitting on 2 billion unwanted coins, according to the Fed’s own estimates.

The total cost to manufacture those unwanted coins: $600 million.

Really, nobody wants these?

I like the $1 coins. Am I the idiot here? There’s vending machines at work that I toss $5 bills into just so I can get back a few of the dollar coins.

Just like the stimulus, I don’t think they’ve done enough here. They haven’t minted enough of them to push them into general circulation and not just into the binders of coin collectors, and I don’t think that they’ve done enough to kill off the $1 bill.

From what I’ve read on the subject, the evidence is pretty overwhelming that ditching $1 bills in favor of coins will save billions in minting costs.

The main point of contention here seems to be an anecdotal argument that the general Yank doesn’t want the extra weight. Waaaaah.