The GOP wants to cut taxes, mainly for rich people and corporations, by at least $1.5 trillion over 10 years. They are quite naturally running into trouble finding compensatory cuts. “Dynamic scoring” fiddles can only go so far. Here is a modest contribution. The savings are only $5.5 billion over 30 years, but they are a sure thing according to the GAO in 2011 , and do not inconvenience anybody with a platinum card. It is quite simple:
Replace $1 bills with coins.
Argument and design suggestions below the jump.
If you are interested, the GAO assumed a life of bank notes of 40 months, of coins 30 years. They allowed for a modest 20% increase in electronic payments replacing $1 coins. Counter-intuitively, the saving does not come from the increased life of coins, but from the fact that people hoard them unwillingly:
It is common for people to take coins out of their pockets and store them at the end of each day rather than retain them in their wallets as they do notes, for use the next day. These factors cause coins to circulate with less frequency than notes. … Our analysis thus assumes that the number of $1 coins issued is 50 percent greater than the number of $1 notes that were in circulation. This assumption of increased production results in substantially increased seigniorage and accounts for our estimate of a net benefit to the government over the 30-year period of the analysis.
The expansion of fiat currency is an interest-free loan to the government, replacing other borrowing, and leads to lower interest payments. QED.
The reform would not be popular. The US government has tried to encourage coins for decades, to little effect. The American public likes $1 bills. I don’t understand it either, but it’s a fact. There is a small mountain of unwanted $1 coins in Fed vaults. It seems that even bank robbers scorn them because of the weight: $1 million in $1 coins weighs 8.1 tonnes. Wikipedia :
A U.S. Mint official claimed in a November 2012 meeting that most of the 2.4 billion dollar coins minted in the previous five years were not in circulation.
So it has to be coercion. No legislation appears to be necessary, though commenters may know better. Trump, through the Federal Reserve and the US Mint, can simply order the $1 notes to be withdrawn. That’s what ten other countries have done over the last half-century, without ensuing riots (GAO report, page 7).
The saving would be somewhat larger if the $2 note joined the $1 one in the shredder. The UK has a £2 coin, the Eurozone a €2 one. Switzerland even has a 5 franc coin, worth $5.11.
One disadvantage of this enlightened scheme in Trump’s eyes is that the great pile of coins that would be released into circulation consists of three types: the Presidential series, which is more or less OK, but also the horribly PC Susan B. Anthony and Sacagawea designs. It would be very costly to melt these all down for replacement. However, the scale of demand means that billions of new coins will be needed, opening the door to a new design better reflecting the Great Again America.
To be helpful, let me suggest two design features. One is to update the obsolete, inaccurate and probably unconstitutional motto “In God We Trust”. Why not take the opportunity to reflect the country’s new alliances, and smooth the path for the future negotiations on the resale of Alaska to its former owners, which would make a much bigger dent in the budget gap? For instance:
В Маммоне мы доверяем
For the main figure, here is a suitably stern and virile design from the Cook Islands, a Pacific dependency of New Zealand, whose currency is the unit. The American version should however have golden highlights.