The White House is eager to call attention to its belt-tightening efforts, including the following:
The Vice President and Secretary Geithner announced the Administration’s plan to stop the wasteful production of $1 coins for circulation. In 2005, Congress enacted the Presidential $1 Coin Act, which mandated that the United States Mint issue new Presidential $1 Coins with the likeness of every deceased President. But more than 40 percent of the $1 coins that the United States Mint has issued have been returned to the Federal Reserve, because nobody wants to use them.
As a result, nearly 1.4 billion excess dollar coins are already sitting unused in Federal Reserve Bank vaults – enough to meet demand for more than a decade. But until today, the Mint was on pace to produce an additional 1.6 billion dollar coins through 2016.
To put a stop to this waste the Administration will halt the production of Presidential $1 Coins for circulation. The Administration will still be required, by law, to continue to produce a relatively small number of the coins to be sold to collectors, at no cost to taxpayers. Instead of producing 70-80 million coins per President, the United States Mint will now only produce as many as collectors want. Regular circulating demand for $1 coins will be met through the Federal Reserve Banks' existing inventory, which will be drawn down over time. Overall, this step will save at least $50 million annually over the next several years.
In strict budgetary terms this is unquestionably the right call. The Presidential $1 Coin Act was conceived of my mining lobbyists and has never had a plausible public policy justification. But what if instead of leaving these 1.4 billion extra coins in the Federal Reserve vaults we held a national lottery and sent one million coins to each of 1,400 lucky duckies? I say the winners would, on average, reduce their indebtedness and increase consumption of real goods and services, thus stimulating an economy that continues to suffer from widespread idling of resources and mass unemployment.