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The Mass Media

I Want YOU to Use Dollar Coins

Uncle+Sams+Obsession+with+Dollar+Coins
Uncle Sam’s Obsession with Dollar Coins

Using dollar coins is every American’s patriotic duty. Back in 2005, Congress passed a law requiring the U.S. Mint to make millions of dollar coins. Now America needs you to use them. Why? It costs only thirty cents to make a dollar coin, but consumers, banks, businesses, and the global market all value them at a dollar. Therefore, for every dollar coin in circulation the national GDP (Gross Domestic Product) is raised by seventy cents.

The major problem? No one uses dollar coins. The Dollar Coin Act of 2005 requires that the U.S. Mint make enough coins to adequately meet demand for the dollar coin. So, the Federal Reserve surveys banks to find out how many dollar coins they think they will need. The banks greatly overestimated demand for the coins. The result? A billion dollar coins sit worthless in vaults. Why are they worthless? NPR’s Planet Money explained on their podcast titled “Wasting Money Making Money.”

“Money is strange. When the Mint mints new coins, before they go out into a bank to be integrated into our finical system they are not money. A bank actually has to call up and ask for them. That is how the physical object of a dollar or a coin that has no real world value becomes currency. Until then you can think of these Presidential dollar coins as pretty little ornaments.”

So far the government has spent $300 million making these pretty ornaments, at thirty cents apiece multiplied by 1 billion minted. By the time the bill expires, they will have spent at least $300 million more.

But let’s just say that instead of sitting in a vault, those billion coins were floating around in peoples pockets and cash registers across the country. Each coin would earn seventy cents. Seventy cents times a billion is $700 million. If the American people used these coins it would, theoretically, raise the wealth of the nation. If no one is using the coins, then why not just kill the bill and stop making them? Well, aside from the benefits of widespread use of the dollar coin, metal has something paper does not: an intrinsic value. The paper dollar value is backed by the full faith and credit of the US Government, which is all well and good; but the dollar coin is not only backed by the government, it has the added bonus of real world value. Illegal as it is, you could melt down a dollar coin and have a few cents worth of metal. That adds reliability to our money.

Love or hate dollar coins, the government is making them. Call your congressman; make all your withdrawals in dollar coins. Do anything you can think of to encourage using them. With all the talk of cuts and spending and deficits, this seems like a simple solution.