dweick

The US Treasury makes a profit, you can read the US Mint's annual report to see how much they transfer, in profits, to the US Treasury every year.

There is no obligation on the US Government when they issue a coin. None, they sell it and they are done with it. If you disagree, tell me what I can demand the government pay me for my $1 coin. It isn't a debt instrument and the government is obligated to redeem it for anything at all.

You are also mistaken in saying the Federal Reserve has to "buy US Treasuries" in order to pay the banks for their coins. First of all, to raise money to buy something, like coins, requires you to sell something so if anything the Federal Reserve would have to sell Treasuries to raise cash to pay the banks for coins.

But the Federal Reserve is free to make as much "money" as it wants. It recently created, out of thin air, $17 trillion that it distributed during the financial crisis. There weren't $17 billion in Treasuries sold by the Federal Reserve to raise that money, they just created it. That's something the Federal Reserve does, they create money, literally.

It is simply false to state that " because the coins are legal tender, the banks have are under legal obligation to pay off $1 of your debt in exchange for that $1 coin". The banks don't pay off any of my debt when I deposit a $1 coin. They merely credit my account with $1 and add $1 to their cash on hand.

If they choose, they can ship excess coins to the Federal Reserve and the Federal Reserve merely credits the bank's account in a manner similar to how the bank credits my account.

No Treasuries or other debt instruments are involved.

The US Mint makes 70 cents for every dollar coin sold and at the end of the year sends the 70 cents to the US Treasury where it is deposited to the general fund. The US Government makes a profit regardless of whether the dollar coin ends up in my sofa or the Federal Reserve vault.

MojaveJack

Will have to be some new, yet to be designed coin as the alloy used in the $1 coin is currently unique to that denomination.

Saw an expo (60 Minutes on CNBC I think) a couple of days back where they were interviewing the director of the US Mint. He stated that 1c and 5c coins cost more to make than their face value. He said they'd love to stop making them but as long as public demand calls for them they expect they will continue.

Seems like a cashless society is creeping closer and closer...

dweick

Coins aren't like shares. They are like pencils. Once Uncle Sam sells them he is done with them. They don't represent a chunk of Uncle Sam and don't entitle the holder to any benefit from Uncle Sam.

brasov02

Pretty much sums up nearly EVERY government program created. Unfortunately good intentions will never make up for the fact that being wise with money is not a priority when it's OTHER people's money you're playing with. We're trillions of dollars in debt. Big Surprise!!! Throwing billions of coins down the toilet with this program is just par for course.
But no big deal. We'll just do what every typical and economically sound American family does when they find they're in debt up to their ears: Just raise their credit card limit and spend more! What part of "keep spending money you don't have will eventually get us out of debt" is so gosh darned hard for these tea party fanatics to understand.
Sorry, I'm digressing...

Anyway, as for all those that have proudly been abusing the intent of the mint program and relying on it to rake in ill-gotten miles and who all equally share in the program's demise I will let Nelson of "The Simpsons" have my final say...
"Ha-ha!"

MojaveJack

With my default page display settings, I have 17 pages posted to this thread today!

Is this a record?

Will we make 20?

dweick

Incorrect, the coins can't make their way back to the mint because the mint doesn't buy excess coins from the Fed or anyone else.

The coins aren't owned by the US Mint or the US Government and it would be the height of folly for the US Government to buy them back and melt them down as that would cost them $1 per coin and their metal value would barely cover the cost of melting them.

milesrus

What is so sad is that we know that these coins could save our country $500 million a year, just eliminate the dollar bill. Instead Congress argues over tiny bills that could save smaller amounts. All of Europe has coins. I am completing a trip of three weeks with the family and have used $475 in coins. When work is done on my house including redoing my pool for over $6000 I always paid them in dollar coins. They would split them among the eight workers. I purchased between $50,000 and $75,000 in coins over the last five years, and never took one coin back to the bank to deposit. So it is a very sad day for me.

dweick

The US Government didn't throw billions of dollars away with this program, they made a profit and that profit reduced the national debt.

But if you are tired of the US government throwing away billions of dollars selling coins for $1 that cost them 30 cents to make and deliver please contact Congress and insist that they let me take over the program. I'm more than willing to take the pain of selling 100 million $1 coins for $100 million minus $30 million in expenses. I'm just that kind of patriot.

brasov02

LaughedOutLoud. You can't be serious? Or else you are one of those that actually believe that you can get out of debt by spending more money you don't have (coughdemocrat). Only in the government can you produce billions of items that people don't want and don't use and claim to come out with a profit. It takes a convoluted shell game to come up with that "profit" but that is essentially the game the government plays with all of its confiscated "revenues."
If only the private sector could make their own funny money and live in their own economic fantasy world.

MyTravels

Again, you're ignoring dilution (which is a contributing factor to increase inflation). This isn't coin specific, increasing money supply, regardless if it's via coins or paper is dilution, which helps devalue currency.

Regarding your pencil analogy, coins are only like pencils if the composition is equal to or greater than the value of the coin.

jamesteroh

Are you guys that have coins to circulate, going to try putting them in circulation or just deposit them?

I have been trying to put as many as possible into circulation by using them at places that only accept cash and in tip jars. I also use them for business purposes to reimburse client parking and for employee small petty cash reimbuursements such as tolls and parking.

I am planning on making my property tax payments next week with the coins, but instead of dealing with the hassle of the coins, deposit the rest of them instead of circulating them. Seeing the mint is eliminating this program, I am sure not going to use them anymore for small purchases such as coffee.

javabytes

They don't really. The program might as well be dead. The miles provided at least some incentive to circulate the coins. Now it's just going to be those who want to go through a lot of extra effort for the gubmint's benefit.

jamesteroh

The program is dead. Who is going to order the coins with a check? In most cases the sender of a wire is going to pay a fee, and theincomingwire fee for a $1,000 wire for most clients is going to be more than the credit card transaction fee.

Not to mention you are giving the mint use of your money for a few days. Is the mint going to wait a few days to insure the check doesn't bounce before shipping or do they use a system like telechecks. If they use telechecks, that fee combined with the extra accounting cahrges, is probably going to be as expensive as a credit card transaction fee.

hobo13

It's a bit ironic that NPR is what actually got this program pulled. I'm not sure which is the bigger waste of taxpayer money -- the coin program or NPR!

fti

I have about $2K left and I am certainly going to continue using them. The Mint is not "eliminating the program", just eliminating purchases by credit card - there is a difference . Why not try to get the coins into circulation? I truly wish the US would make the decision to just eliminate the $1 bill. That is really the only way for the $1 coin to stay in circulation.