Fed News Friday: Saving Money by Switching to Coinage? What a Concept!
March 11th, 2011As we all know Congress and our President have been attempting to solve our fiscal crisis one little billion at a time (except for the recent proposal to cut $500 billion). The government has offered different options at this point like spending freezes, entitlement program cuts, selling off unused government property, among many other brilliant plans that will shave off a single digit percentage of the overall budget.
One of the master plans I heard yesterday was to completely phase out the Dollar Bill. The plan claims that by switching from paper to coinage the US could save $5.5 Billion dollars in the next 30 years (roughly $180 million/yr). If you aren’t chuckling at these sadly modest numbers, you should be. We are currently $14.2 trillion dollars in debt and this master plan to phase out one piece of currency that seems to be “wearing too fast”, would take a mere .03% out of the total debt…and that is over 30 YEARS if our debt were to remain constant, which according to current spending standards doesn’t seem to be very likely to see our debt plateau.
So let’s go back to the reasoning for the plan to get rid of the dollar.
I believe we’ve covered this idea, or something similar in the past (the characteristics of real money). The Federal Reserve has not only provided us with a currency that wears and tears very easily, it’s backed by only consumer confidence and debt, not REAL value. This is a great example of showing why precious metals serve in retaining value and even increasing in value. if you aren’t following me 100%, because they know better than I do on how to incorporate metal into the fiscal system.
Experts said one issue in a possible transition of the Dollar Bill to Dollar Coin would be that almost all Americans would choose the bill over the coin, unless the bill was no longer printed at all. Why? They are most socially acceptable, easier to carry, and no one hassles you when paying if it’s in bills. Ever paid for gas or a meal in all change before? I have and it’s humiliating for the silliest reason; because either way it’s still MONEY! Now that I am more knowledgable about the silver content in the coin piles I was carrying around to pay for gas I’d cry at how much potential wealth I was giving away with those pre-’65 quarters. Alas, here we are today arguing over $5.5 billion dollars of savings in switching from paper to metal. Maybe they could just make the dollar smaller so production costs wouldn’t be so high? Now wouldn’t that be cute!
Let’s see if this plan sticks…or any other brilliant money saving plans the administration is coming up with. They seem to be on a roll (I hope my sarcasm isn’t too thick).
