||| FROM MSN NEWS|||
Since the start of the pandemic, if you’ve been paying for things more with your debit and credit cards and less with the bills and coins in your pocket, you’re not alone. Over the last year and a half, as stores and restaurants shuttered across the country (and we’ve wanted to touch fewer things), we’ve increasingly resorted to buying items online using plastic.
Is there a national coin shortage?
First — as the Federal Reserve wants you to know — the problem is not a lack of coins. The Fed said it’s producing enough of them, minting 14.8 billion pennies, nickels, dimes, quarters, 50-cent pieces and dollar coins in 2020, a 24% increase from the 11.9 billion coins produced in 2019.
Instead, the Fed says, the problem is that due to the pandemic the coins are collecting dust in homes and businesses when they should be continually circulating through the economy.
In nonpandemic years, transactions at retail stores, vending machines, payment kiosks and banks would be enough to keep coins flowing. The US Mint said in 2019 retail and other financial transactions accounted for 83% of the flow of coins in circulation; just the remaining 17% came from newly minted coins.
When the country shut down last year, the share of credit card payments for the first time eclipsed cash payments, the Fed said, as we held onto to bills and coins instead of spending them.
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© Provided by CNET Through the pandemic, we’ve not been using our paper money and coins as much. Angela Lang/CNET
What’s the problem with having fewer coins in circulation?
The concern with the growing stockpiles of coins — beyond that you can’t snap shut your bulging coin purse — is that businesses will be unable to complete cash transactions if they lack coins to make change.
And a coin shortage can disproportionately hit lower-income families that don’t have debit or credit cards. According to a survey conducted prior to the pandemic, 29% of lower-income Americans (making less than $30,000 per year) said they make all or almost all of their purchases using cash — versus 7% for individuals making $75,000 or more per year.
How can we get more coins circulating?
The Federal Reserve is concerned enough about the coin supply problem that it’s convened a U.S. Coin Task Force to look for ways to get coins moving.
READ FULL ARTICLE: www.msn.com/en-us/news/technology/what-national-coin-shortage-here-s-the-scoop-on-your-quarters-dimes-and-nickels/ar-AAMKc6T
Don’t be too surprised when the newly-convened US Coin Task Force (well-staffed/funded?) calls for a (well-staffed/funded?) cleverly-named Investigative Committee to hold coin shortage hearings in DC next year sometime. It’ll all likely be funded through new Infrastructure trillions. There’ll be hearings, experts getting per diem, commentary from the breathless obligatory Maddow/Stelter herd, editorials about “Paper Supremacy”, etc. etc. Ultimately, accomplishing nothing, but we’ll have a new collection of buzzwords to play around with, until the next crisis takes center stage. That’s my two cents’ worth.
Carl: two cents well spent.