Amidst the troubles in the US economy, you would expect that the people would be very willing to find out and utilize a variety of ways to be able to pump money into it. However, one of their actions regarding the use of silver coins is actually hindering them from saving nearly 1 billion dollars. The action that is being talked about is the fact that the American public doesn’t seem to like to use the 1 dollar coins that the US treasury has created.
The overload of gold and silver coins:
Back in 2005, former Delaware representative Mike Castle initiated a bill which included a part mandating that the U.S. Mint should produce coins to commemorate each and every president of the country (currently, it is in the 18th iteration, Ulysses S. Grant). However, the bill also mandated that 20% of the newer coins that the mint produces should still contain Sacagawea, the original figurehead in the dollar coins. The creation of these coins has now led to around 1.2 billion gold and silver coins inside vaults of the Federal Reserve. If the presidential coin series honoring all the past presidents are finished, the forecast is that there would be 2 billion silver rounds sitting inside the vaults. Unfortunately, the American public is still truly hesitant to embrace these coins as their top choice for handling their pocket change.
The problem:
While the U.S. treasury would want more people to utilize the gold and silver rounds in a more widespread manner, the people are still hesitant to use it. Some of the reasons behind it is the fact that the silver coin can be rather unwieldy. This is best seen when you compare 10 dollars worth of 1 dollar bills with a similar amount worth in coins. The weight of the coins would definitely be much heavier than the paper bills.
Another reason is that cash, may it be paper bills or silver rounds, are actually being pushed as a secondary means of payment. This is because more and more people are shopping with their credit and debit cards as well as shopping through online means.
Because people are hesitant to use it, the gold and silver coins are just locked up inside the vaults. This is unfortunate as it invalidates the supposed benefits of the silver rounds such as increased longevity due to durability as compared with the existing dollar bills. The Mint is saying that if we are able to stem the use of the dollar paper bills through the gold and silver coins, then we wouldn’t have to spend as much on the printing of money.
However, since these coins are in storage and are unused despite the legislation to create them already being in place, the, American taxpayers are actually spending to just store and even increase the surplus of these gold and silver coins. This can be considered as a rather large waste of taxpayer dollars that could have been used for other pressing concerns in the economy.
Comments are closed.