November 26, 2006

Day Late and a Dollar Short?

AS I'VE BEEN AWAY for the past week, I've been out of the loop in terms of the news. Oh, sure, I caught the stories about the hordes of shoppers descending like zombies upon the malls in the dead of night, but that's something which happens every year. I mean stories like this, which I happened to miss, but discovered just now thanks to Adam Nash.

Basically, the Government has rebooted its $1 coin program, and done so in a rather clever way. Instead of having just one golden dollar coin, which no one could ever find outside of a vending machine, they're going to produce dollar coins with the images of the nation's Presidents on them. It's not a bad idea when you think about it, either. After all, if people went crazy collecting quarters because they had iconic images of Nebraska on them, it's a good bet they'll be crazy for dollar coins with Presidents on them.

Sure, out of 300 million Americans, only about 16 actually remember who the hell William Henry Harrison was, but that won't have an impact on things. People will simply figure folks like Harrison (and his grandson) are just the Baltic and Mediterrenean Avenues of the Presidency -- they may come in handy, but they're not really necessary to win the game.

Anyway, these coins are good for America, because it means the Government will undoubtedly profit from seigniorage in issuing them -- perhaps as much as several billion dollars. It would especially be nice if the Government would mint a whole bunch of these coins so people could actually use them, instead of throwing the odd dollar in a change dish, or saving it for a vending machine.

The real genius, I think, was the Government's decision to issue gold coins -- real gold coins -- bearing the images of the nation's First Ladies. Each coin will contain one-half troy ounce of gold, making them worth far more than their $10 face values and their office-holding counterparts. Now that's some very sly humor, if you ask me!

Still, I do wonder what will happen when people start getting stuck with Presidential dollar coins they don't particularly like. For instance, let's say someone happens to receive change with a President Nixon dollar in it (the Nixon coins are due out in 2016). Would it be poor form for that person to throw the Nixon dollar to the ground, stomp on it several times, pick it up scornfully and then pooch-punt it into the produce section? What if the person then shouted something like, "And you can take your wage and price controls and kiss it!" as the coin went hurtling towards the boxed arugula? Or would it be better for one to simply sneer at the coin as one deposits it in one's pocket, and then try to find a convenient place to unload it?

In either case, I think you'd have problems. After all, let's say the Nixon dollar bounced off the boxed arugula and shot somebody's eye out. That'd be a lawsuit faster than you could say gas rationing. Plus, since people have myriad opinions on Presidents, you'd face a veritable barrage of coinage from day one. Trying to offload the coins one didn't want wouldn't be easy either, as the following dramatization attests:

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WAITER: I don't suppose you have any paper dollars, do you, sir?
ME: Uh, no! Not at all! Just these Warren G. Harding Presidential $1 coins! Yeah. Warren Harding.
WAITER: Liar!
ME: No, I'm not lying. All I have are these Harding coins. Now ring me up, please.
WAITER: Dammit! Do you know how many Harding coins I'm stuck with? I keep handing them out as change and people find ways to give them back to me!
ME: Well, Harding was a bit of a louse, and ...
WAITER: I don't give a damn if he mooned the Senate and insulted Lloyd George's wife! Stop giving me these goddamned coins! All of you, stop it!
ME: I've got a McKinley in here, would that do?
WAITER: NO!

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Then, there's the third problem: what happens when you give someone a coin in payment for goods and services, and they don't want it?

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STORE CLERK: Hey. What type of Coke you want with that?
ME: Uh ... Sprite Coke!
CLERK: Got it. That'll be a buck for the Sprite.
ME: Here you go. Thanks!
CLERK: ...
ME: Is something wrong?
CLERK: You ain't from around here, are you, boy?
ME: Beg pardon?
CLERK: I mean, that money's no good here.
ME: It looks like legal U.S. tender to me. What the's problem?
CLERK: (holds up the coin)
ME: Yeah, so it has ... oh, come on! That was 150 years ago!
CLERK: ...
ME: You can't be serious.
CLERK: ...
ME: Well, I don't have another dollar. I spent my last dollars on these sandwich thingies ...
CLERK: Paper cash might work.
ME: Oh, for God's sake. All right, hold on a minute.
CLERK: Much obliged.
ME: I don't suppose you could break a $50?

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Ah well. In any event, I'm confident the Government has already thought through these problems, and figured out workable and reasonable solutions for them. Heck, maybe those solutions even involve more seigniorage. We'll see how things turn out, but if my scenarios come true, it's possible we could cut away a good-sized chunk of the budget deficit.

Posted by Benjamin Kepple at November 26, 2006 10:02 PM | TrackBack
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