Waste Upon Waste Upon Waste – U.S. Overproduction of Dollar Coins
Come back Thursday July 21 for my new Podcast with former U.S. Treasury Secretary Paul O'Neill, where we talk about his work to improve patient safety in healthcare (see an earlier blog post here as a preview). I wish I had asked him about this new story, but I heard about it after our call.
The headline pretty much says it all: “US Mint: Wasting Money By Making Money.” It's not just the “waste of overproduction,” making coins that people don't want in their pockets, but the government is now planning to build a $650,000 warehouse in Dallas. This would be good for our local Texas economy, but bad for the country.
From the article:
The U.S. Mint in Philadelphia is a big, noisy, busy operation, capable of minting nearly 2 million presidential dollar coins daily. But most of those coins go into storage, never seeing the light of day. Costing 32 cents apiece to produce, these manganese brass dollars have proven unpopular with a public that prefers paper.
ABC News went to one such storage facility, the Federal Reserve in Baltimore, where the coins are in plastics bags and cardboard boxes, stacked one on top of another, creating several aisles of presidential coinage worth millions of dollars.
And if the overproduction wasn't bad enough:
In their most recent annual report to Congress, the Federal Reserve says the coins are piling up so quickly they will need to spend $650,000 to build a new vault in Dallas to hold them. Shipping the coins to the new secure facility will cost an additional $3 million.
The waste of overproduction, the waste of transportation, and the waste of inventory.
Thank you, Congress!
Passed by Congress in 2005, the Presidential $1 Coin Act ordered the mint to make millions of coins to honor every dead president, but not even Sen. Jack Reed, D-R.I., one of the co-sponsors of the original bill, uses the legal tender.
Again, this appears to be the fault of Congress, not the U.S. Mint. Congress ordering these coins is like a GM dealer order cars that customers don't want (except in the auto industry, it's more often GM or Chrysler that forces car inventory on dealers).
A reaction yesterday from Twitter:
From: @davidwherry David Wherry@markgraban Crazy. I took Lean training w/people from the mint at OSU. Gov't legislation keeps them from implementing.
For those who haven't noticed, the United States is in a really bad situation, financially. Is ending this crazy program to produce unwanted coins part of the the debt ceiling debate?
Meanwhile, the coins keep coming off the production lines, already more than a billion made and counting.
A cynic might ask if “Government Motors” been teaching the U.S. Mint how to “push” production instead of allowing customer to “pull” coins when they are really needed or wanted…
A realist would ask if we should be more concern about the BILLIONS of wasted healthcare spending that occurs annually. Mr. O'Neill estimates that we waste ONE TRILLION each year, as the result of poor quality and systemic inefficiency in healthcare. All things considered, the fight to improve healthcare is far more important than the fight to reduce the inventory of coins… and which waste gets more attention in the news? We can SEE the inventory of coins. It's really hard to see the human cost, as well as the financial cost, of poor healthcare quality, isn't it?