Perhaps we should have a contest to determine what should be done with the billion surplus dollar coins that are backing up in the hands of the Federal Reserve.
The surplus has come to the attention of the National Public Radio website and a thoughtful reader sent me a link to it.
Collectors have known for some time that there are more dollar coins than the normal demands of commerce can absorb. The Mint created special programs as an attempt to whittle away at the supply and failed. I even once suggested shipping the surplus to Kabul, Afghanistan, instead of U.S. paper money to make the bribe takers there work a little harder for their ill-gotten gains. But nothing has really caught on.
What do you think should be done? No, you cannot suggest that the Mint not make any additional coins. That would be stating the obvious and we can’t have that in this day and age, now can we?
My former boss Clifford Mishler collects stickered dollars. They are dollar coins that a local business put its own sticker on and then spent them back into circulation. This was often done as a means of proving the importance of a particular payroll to the local community.
In that spirit, perhaps the federal government could pick a number of Social Security recipients at random and send a Brink’s truck to their door with their monthly retirement payment in coins.
Not only would the recipient’s expenditure prove to his or her community the importance of these retirement dollars, but it would also probably persuade the recipient that now is indeed the time to sign up for direct deposit electronic transfer to prevent this from ever happening again.
How about tax refunds? If it would speed up my refund, I would be happy to take it in dollar coins. I’m sure others would feel the same way. Now it would have to really be faster, because I am probably the only one who wouldn’t complain if it wasn’t. After all, I could write about spending them at the Crystal Cafe. Other readers might not have such understanding restaurant staff to blow off their coins to.
Or perhaps the government could do what it did in the Civil War. To persuade people to take paper money, some notes were interest bearing and people would actually get more than the note’s face value.
The federal government could decree that every Presidential dollar that is accepted today will be redeemed 12 months from now for $1.05, or for $1.10 two years from now.
Yes, I am quite aware that the government can borrow money much more cheaply than the implied 5 percent interest for the coins, but I am thinking of all the money saved on storage fees. A nickel a coin per year will probably be cheaper than the secure storage required by the Federal Reserve. But then the problem might be how to prove you’ve had the coin for the prescribed one or two years.
Got a better idea? Email me at email@example.com.