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#11
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On Wed, Padraic Brown wrote:
Um. HELLO? I just proposed a broad based survey to research this issue! I specified those segments that handle cash regularly and in great quantity; but have also suggested including the "common spender" in the past. I am having trouble finding facts that agree with what I see in the quantity of cents and the dates of dollar bills. There are definitely enough cents in circulation, it is time for the FRB to suggest that banks try to find a way to recirculate cent surpluses amongst themselves. I see no reason at all for a bank to stock $2 bills unless a race track is a customer, or enough merchants want them to use in making change, to warrant stocking the minimum shipment. But the bigger issue is how much truth there is in the numbers of dollar bills printed in direct replacement of destroyed bills. I could support dollar coins more forcefully if I were to see good evidence that it actually costs a lot more to use dollar bills than dollar coins (I do not think the present alloy sandwich faces are what will keep the SAC looking good for 30 years). What I have done on a small scale is to check dates of dollar bills that I have, and it turns out that 10 out of 12 were 1999 series bills (this was from 12 bills I received from the same source, change for a $20 bill). For a bill to only last 18 months there should only be about 2 or 3 out of ten older than 2001 series, as the published numbers for dollar bills in circulation are just passing 8 Billion. And it would be helpful to know how many bills are still actually in circulation, there are a number of cases where dollar bills are used that dollar coins would never be used, and many ways that dollar bills will be lost forever (but probably not collected to the extent that coins are). Many merchants place the first dollar bill received in a frame with their business license, so that could account for several million bills. Tracking the dates of worn bills being destroyed does not tell the average lifetime, but a survey of the dates of bills in circulation should as long as the survey is not of direct bank withdrawals that may contain all new bills. And somthing that might sway my opinion and whether I care or not is knowing who benefits from the bills that are lost or placed where they will never be redeemed. This is important even for dollar bills, but more important for larger denomination bills, if government costs or profit is the driving issue, then the governemt must be the entity to lose or gain from any changes. If it turns out the FRB pays for all printing and keeps all issued bills listed as possibly redeemable, then the government would not even be involved in the issue, and all support for doing away with dollar bills is misguided. It is certain that many millions, if not Billions, of bills of all denominations will never be redeemed, and whomever it is that benefits from that fact can apply the gain from lost bills to the printing costs. The government seems to definitely receive the "profit" from the mint, but the "profit" from printing bills can vary according to how the bookkeeping is done, either it shows up in excess revenues of the FRB, or just stays on the books as a redeemable debit forever, with possibly no benefit to any entity ever realized in a way that shows up on the books. As it is, claims that the government would gain by the use of dollar coins instead of bills are suspect, I have been assuming the treasury received the benefit of lost bills, but now I am not sure. And if the treasury does not receive the "profit" from printing paper money, then the government does not pay for the printing, and it seems to be a non-issue in either case. Joe Fischer |
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