NPR’s Planet Money has found a huge stash of unused one dollar coins piling up at the Federal Reserve. The government required their production in 2007, so the U.S. Mint continues to make these coins, which have now cost $300 million to manufacture.
Here’s how the federal government got into this situation:
In 2005, Congress decided that a new series of dollar coins should be minted to engage the public. These coins would bear the likeness of every former president, starting with George Washington. There would be a new one every quarter. So, far, the Mint has produced coins through the 18th president, Ulysses S. Grant.
Members of Congress reasoned that a coin series that changed frequently and had educational appeal would make dollar coins more popular. The idea came from the successful program that put each of the 50 states on the backs of quarters.
But as the new presidential dollar coins rolled out, the greenback lost none of its dominance in Americans’ hearts and wallets.
Moreover, despite being unpopular, the presidential dollar coins were added to existing production of the normal Sacagawea dollar coins.
The deal: The mint would be required to make a quota of Sacagawea coins. Currently, the law says 20 percent of dollar coins made must have Sacagawea on them.
So, there are now about 1.2 billion dollar-coin “assets” chilling in Federal Reserve vaults, unloved and bearing no interest. By the time the presidential coin series finishes, and there are coins honoring all past presidents, there could be 2 billion.
Unfortunately, the situation is ongoing, and the stockpile is growing at a fixed rate:
Source: Federal Reserve Credit: Robert Benincasa, Christina Baird, Nelson Hsu
The finances of all of this? You could say the government has wasted money to make money.
Some 2.4 billion dollar coins have been minted since the start of the program in 2007, costing taxpayers about $720 million. The government has made about $680 million in profit by selling some 1.4 billion dollar coins to the public since the program began.
Listen to the NPR radio program featuring the coin investigation here.
Sources:
“$1 Billion That Nobody Wants” Robert Benincasa and David Kestenbaum. NPR.org. https://www.npr.org/2011/06/28/137394348/-1-billion-that-nobody-wants
