Starting with a blog post on the Wall Street Journal website, the interwebs were all a twitter about the a testimony statement published in advance of the “The Future of Money: Dollars and Sense” hearing before the House of Representatives Subcommittee on Domestic Monetary Policy and Technology November 29, 2012.
The testimony is by Lorelei St. James, Director, Physical Infrastructure Issues of the non-partisan Government Accountability Office. The testimony report, “Benefits and Considerations for Replacing the $1 Note with a $1 Coin,” reiterates the six previous GAO reports claiming large savings by replacing the paper dollar with a coin. This is not a new stance by the GAO. They have issued six reports since 1990 making the same recommendation with the last report (GAO-12-307) released on February 15, 2012—something I wrote about here.
Rather than concentrating on the redux of the GAO’s statements, the media missed the advance statement from Beverley Lepin, Chief Operating officer of the Royal Canadian Mint. In her testimony, Lepin will point out how the RCM changed alloys twice, has a coin recycling program, added color, and has anti-counterfeiting technology for their one-dollar (Loonie) and two-dollar (Toonie) coins.
Basically, Lepin is saying something only whispered by some: the Royal Canadian Mint is more advanced than the U.S. Mint.
But the problem is not the U.S. Mint’s fault. When it come to running their operation like a business, the RCM has a real business structure that works with the the Bank of Canada and the Parliament of Canada to ensure that their money supply is modern and more efficient. Neither Canada’s parliament nor the Bank of Canada micro-manages the RCM’s operations the way congress micro-manages the U.S. Mint.
I know that Article I, Section 8 of the United States Constitution says that “The Congress shall have Power… To coin Money, regulate the Value thereof, …” but it does not say that congress shall have the power to micro-manage the U.S. Mint to the point where it is running using rules that have been made as long as 220 year ago. Maybe it is time to learn the real lessons from the RCM and modernize the structure of the U.S. Mint.
Before some strict constitutionalist or ardent supporter of congress accuse me of trying to usurp congress’s powers, let me remind you that Article I, Section 8 also grants congress the power “To establish Post Offices and post Roads.” The last time I looked, the United States Postal Service is an independent organization that establishes and closes post offices and it has been over 50 years since the last time a “post Road” has been built.
I do not expect anything to happen as a result of this hearing except for verbal fireworks from the politicians, overly excited sound-bites from the cable news talking heads, and incorrect information from the print media—which we will correct here, of course. I will just sit back and enjoy the show of the last hearing of this type held by a Ron Paul-lead subcommittee.
The following is a list of the reports and testimonies from the Government Accountability Office about replacing the one-dollar note with a one-dollar coin:
- National Coinage Proposals: Limited Public Demand for New Dollar Coin or Elimination of Pennies, GAO/GGD-90-88, May 23, 1990
- 1-Dollar Coin: Reintroduction Could Save Millions If Properly Managed, GAO/GGD-93-56, March 11, 1993
- Dollar Coin Could Save Millions, GAO/T-GGD-95-203, July 13, 1995
- Financial Impact of Issuing the New $1 Coin, GAO/GGD-00-111R, April 7, 2000
- U.S. Coins: Replacing the $1 Note with a $1 Coin Would Provide a Financial Benefit to the Government, GAO-11-281, March 4, 2011
- U.S. Coins: Alternate Scenarios Suggest Different Benefits and Losses from Replacing the $1 Note with a $1 Coin), GAO-12-307, February 15, 2012
- U.S. Coins: Benefits and Considerations for Replacing the $1 Note with a $1 Coin, GAO-13-164T, November 29, 2012