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 Replies: 10 / Views: 1,092 |
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New Member
United States
29 Posts |
Something I've been wondering about for awhile is how much revenue do coins generate for the U.S. government? With all the proof sets, unc coins, etc that are sold on the US Mint website, it must bring in a pretty penny...so to speak!
Anyone know how much revenue is brought in?
Also, since so many of us hoard coins, how does having so much money out of circulation effect the govt?
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Pillar of the Community
United States
749 Posts |
A question in which I would like an answer as well.
Good One dgoldy88
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Pillar of the Community
United States
535 Posts |
Regarding the hoarding of coins - I don't know if I'm correct or not, but I figure it like this: The government spent $.03 cents to make a Sacagawea dollar. I give them a paper dollar and hold on to the sacagawea which will never go back into circulation. They've basically produced revenue of $.97. It would be no different than if they produced a "commemorative medal" for a .03 and then sold it for 1.00. Everytime I take a coin out of circulation, I'm giving revenue to the US goverment. I don't know if thats correct or not, but thats how I figure it. |
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New Member
 United States
29 Posts |
Karrlot, the govt doesn't know that you aren't going to spend your Sacagawea dollar. So they don't know that they made the 97 cents. |
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Moderator
 United States
188213 Posts |
I am not sure of the exact amounts, but the mint makes a great deal of profit (through seigniorage) off of every dollar, half-dollar, quarter-dollar, and dime it sends to the banks. Although they actually lose money on cents and nickels.
They make this profit regardless of whether those coins circulate or not, because the banks have already "paid" for them. Circulation can affect long-term profit, since the more they circulate, the more they wear down, and the more that must be minted to replace them. Hoarding can affect it as well; more must be minted to replace the shortage.
IMHO, the Mint is one place where the Government does a good job of staying in the black.
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Bedrock of the Community
United States
20753 Posts |
IMHO, the Mint is one place where the Government does a good job of staying in the black.
Wishfull thinking. As with any branch of our government the entire story is not explained. Everyone hears it costs xx to make a cent or xx to make a nickel, etc. Most of this is from our governments statements and not complete. This is usually based on the cost of the metal, machines, etc. Many, many things are left out since they are payed for by your taxes. For example the Mint workers salaries, health insurances, retirement funds. Then there is the little things like the buildings maintenance, electric and other utility bills. Of course the tons of paper, ink, printer cartridges, pencils, pens, paper clips, etc. are to trivial to mention used in the Mint buildings. Of course we can't mention all the money utilized by congress or the senate involved in what the next cent will look like. There are so many things involved with the production of our monitary system that if included in the cost of producing a cent it would be staggering.
If you own a company you know that all the above are paid for by you. They come out of the profits of your company. You do not have the abiity to collect side money like taxes to cover all your expenditures.
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Pillar of the Community
Australia
2830 Posts |
G'day, as long as the government relies on deficit-financing, it hardly matters that the mint wins, loses, or breaks even.
I suspect that the situation in USA is similar to Oz (given our shared heritage): the government attempts to control the volume of money in circulation. So the Mint, the Treasury, and other organs of state, are regulated.
In Oz, any mutilated coins or notes that make their way back through the banking system, are replaced at face value. As this does not involve any change in the volume of money, this happens nearly "automatically".
Secondly, coins and notes have been given "use-by" dates. Any coins or notes not replaced when they are mutilated, are assumed to be irretrievably lost when their use-by date comes up. Of course, we, as collectors, know that some, perhaps a lot, of "old" coins and notes are kept in our collections. The government doesn't really care.
I don't know what the assumed life of paper or polymer notes is. But in the 1980s or '90s, the Australian government reduced the life of coins from 50 years to 7 years. This subtle change permitted a vast amount of coins to be issued, but without any apparent movement in the volume of money. Perhaps the change was justified, but the point can be debated. Some call it "creative accounting".
Some economic theorists regard all of this as irrelevant: most transactions today are based on electronic transfer of funds; credit cards; or cheques. Hard cash is such a small component of the total movement of money, that its volume hardly has any impact.
The nearest I have seen to a "cash-less society" is Hong Kong: it seems that the only people there who use cash are tourists.
I hope that I haven't digessed too far from the topic.
Peter in Oz
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Moderator
United States
188213 Posts |
It has always been my understanding that seigniorage takes into account the complete cost of manufacture, not just the differential between the metal used and the face value. That is, it accounts for the building, employees, machinery, office supplies, etc, etc, etc.
Of course, since when do I trust our government to be honest about something? Silly me! Given our government's quality accounting principles, I would not be surprised if much of the cost has been shifted to the some other losing cause in order to inflate its budget.
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Bedrock of the Community
United States
17884 Posts |
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Bedrock of the Community
United States
20753 Posts |
Some economic theorists regard all of this as irrelevant: most transactions today are based on electronic transfer of funds; credit cards; or cheques. Hard cash is such a small component of the total movement of money, that its volume hardly has any impact.
The nearest I have seen to a "cash-less society" is Hong Kong: it seems that the only people there who use cash are tourists.
I hope that I haven't digessed too far from the topic.
Peter in Oz
Peter, I've been telling that same thing over and over but no one listens. I firmly believe all countries everywhere will soon enough drop all present monitary systems. International trades just don't work if you have to constantly convert monitary quantities. All such transactions that require cash will slowly vanish everywhere. Already in our society most younger individuals carry little to no cash. My son is a great example. He uses plastic at stores, gas stations, restaurants, everywhere. I don't think he ever has cash. our toll roads are going almost all electronic and if you insist on paying cash the cost is double. Ever see that Visa commercial where everything is running smooth until someone attempts to use either cash or a check? No with people traveling more and more to all countries everywhere, currency of any type is going to become a thing of the past.
I always say someday a kid will be asking "Hey Grandpa, what was that stuff you people used to use in the old days called money?"
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New Member
United States
29 Posts |
Condor101, thanks for the 2006 US Mint annual report. It contained what I was looking for: "In FY 2006, the United States Mint's earned revenue increased to $1,641.1 million plus other financing sources(seigniorage) of $682.4 million totaling $2,323.5 million." Pretty cool! There was also a lot of information about the challenges the Mint will be facing in the future. It helped me understand their strategy for introducing the Presidential dollar coins when they did. And...I learned a new word, seigniorage! |
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Replies: 10 / Views: 1,092 |
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Posted 01/11/2008 10:44 pm
