Coin World: Surprises galore in 44-page GAO report on coins and notes
BackroadJunkie
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Hmmmm....
Take a read. Highlights
coinworld:Surprises galore in 44-page GAO report on coins and notes
The GAO recommends providing the Treasury secretary “with the authority to alter the metal composition of circulating coins if the new metal compositions reduce the cost of coin production and do not affect the size, weight, appearance, or electromagnetic signature of the coins.”
The dollar:
The GAO found that, depending on the scenario, replacing the $1 Federal Reserve note with a $1 coin could result in a net loss to the government of up to $2.6 billion over 30 years.
The cent:
The Mint estimated during Fiscal Year 2017 the bureau stood to save approximately $27 million annually if production of the Lincoln cent was suspended. For FY 2017, the Mint lost $27.3 million from the combined production at the Denver and Philadelphia Mints of 8.4 billion cents.
The nickel:
The U.S. Mint estimates savings of between $2.2 million and $9.1 million annually over a 10-year period if the bureau changed the alloy of the Jefferson 5-cent coin from 75 percent copper, 25 percent nickel, to 80 percent copper and 20 percent nickel.
(I put in the headers to separate the quotes...)
Comments
I bet everyone on this forum has several jars of both nickels and cents. We could just suspend making them for a couple of years!
No doubt the accumulation of change in jars and bureau drawers of this country is significant....I wonder how much of an impact it would have if everyone 'cashed them in' at banks or coin machines....Cheers, RickO
Thanks @BackroadJunkie!
To determine selected stakeholder views on changes to currency, we identified 91 entities that could potentially be affected by reviewing prior GAO, Mint, and Federal Reserve reports and the results of a literature search. We eliminated some of these entities from further consideration because we could not identify a way to contact them or they did not respond to our efforts to contact them. We sought entities with the broadest representation so we generally eliminated individual companies, with the exception of those that are primary suppliers of raw material for the production of notes or coins.2 Of the remaining 36 entities, we selected and interviewed 10 organizations representing potentially affected industries, primarily based on the entities’ role with respect to currency and the currency change likely to affect it most. We also selected and interviewed a private company involved in the production of materials used in coins and two organizations that advocate for a switch to a $1 coin and for continued use of the penny, respectively.
The stakeholders we selected are:
• American Bankers Association, aba.com
• Americans for Common Cents, pennies.org
• Association of Gaming Equipment Manufacturers, agem.org
• Coin Laundry Association, coinlaundry.org
• Coinstar, coinstar.com
• Dollar Coin Alliance, dollarcoinalliance.org
• International Bridge, Tunnel and Turnpike Association, ibtta.org
• International Parking & Mobility Institute, formerly the International Parking Institute, parking-mobility.org
• Jarden Zinc Products, jardenzinc.com
• National Armored Car Association, nationalarmoredcar.org
• National Automatic Merchandising Association, namanow.org
• National Bulk Vendors Association, nbva.org
• Retail Industry Leaders Association, rila.org
Full report: https://www.gao.gov/assets/700/697778.pdf
Can someone explain how replacing the rag-buck with a dollar coin results in a net loss?
Aren't we replacing paper one dollar bills about every 12 to 18 months? Granted, the paper bills cost less than a dollar coin base in metal and production, but the metal dollars last at least 10 times as long as paper.
Is there some vodoo-economics going on with that statement?
“For our 2011 report, we assumed a median lifespan of 3.3 years for the $1 note based on Federal Reserve data.23 Since then, the $1 note lifespan has increased, and our current simulations assume a median lifespan of 7.9 years based on the most recent data from the Federal Reserve. Due to this substantially longer note lifespan, fewer $1 notes need to be produced over a 30-year period, which reduces the cost of producing them and diminishes the relative advantage of the long coin life. In our 2011 simulations, a $1 coin was assumed to last about 10 times as long as a $1 note (34 years to 3.3 years); in our current simulations, the lifespan of the coin remains the same but is now only about 4.3 times as long as that of the note (34 years to 7.9 years). Meanwhile, the relative cost of producing coins and notes has remained about the same.” From page 11 of the report.
The Sacajawea dollars will last a lot longer than 34 years, especially if several hundred million of the 2000's are still going to sit Government vaults in bags for decades.
Make them out of titanium (current cost $2-3/pound) and they would last 100+ years. Of course no one would use them either.
And modern Federal Reserve notes are made of linen and cotton fibers, not paper.
My US Mint Commemorative Medal Set
This is all voodoo economics.
The concept that they make 10 billion pennies At only a 27 million dollar loss is nonsense. They just dump all the depreciation and costs on other denominations.
They calculate the horror of a Crane Paper Co employee losing his job at billions of dollars so imagine how afraid they are of losing the Jarden lobbyists and Americans for Common "Sense" lobbyists!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Voodoo economics can be defined as the effect on rich people.
The country would gain billions with a usable economic system but the government wants credit cards and your phone ringing twenty times a day. Keeping the penny is great business for government because it hastens the day they can stop making $100 bills.
That's kind of what I was trying to say, but you said it better (or at least more understandably).
Me thinks quarter dollars will go up this year as the hunt goes on for the 2019-W’s.