WEBVTT 00:00:00.760 --> 00:00:04.639 So picture a road paved entirely with shiny golden 00:00:04.639 --> 00:00:06.980 coins just stretching all the way from Los Angeles 00:00:06.980 --> 00:00:08.720 to Chicago. Right, which sounds like something 00:00:08.720 --> 00:00:12.000 out of a fairy tale. Yeah, exactly. But, you 00:00:12.000 --> 00:00:14.480 know, realize that this isn't a metaphor at all. 00:00:14.820 --> 00:00:18.359 It is the literal physical reality of a United 00:00:18.359 --> 00:00:21.070 States government program. that just went completely 00:00:21.070 --> 00:00:24.410 off the rails. It really is the ultimate example 00:00:24.410 --> 00:00:27.730 of a grand vision just violently colliding with 00:00:27.730 --> 00:00:30.609 stubborn everyday reality. Totally. Well, welcome 00:00:30.609 --> 00:00:32.490 to your deep dive. We have this incredible stack 00:00:32.490 --> 00:00:35.450 of sources today detailing the legislative history, 00:00:35.869 --> 00:00:38.630 the bizarre production quirks, and frankly, the 00:00:38.630 --> 00:00:40.850 massive economic fallout of the United States 00:00:40.850 --> 00:00:43.310 Mint's operations in the early 2000s. Yeah, there 00:00:43.310 --> 00:00:45.649 is a lot to cover here. There really is. Your 00:00:45.649 --> 00:00:47.969 mission today is to explore the fascinating, 00:00:48.509 --> 00:00:51.350 slightly absurd, and highly lucrative yet ultimately 00:00:51.350 --> 00:00:54.250 failed world of the presidential $1 coin program. 00:00:54.310 --> 00:00:56.810 Which is such a wild story, honestly. It is. 00:00:56.829 --> 00:00:58.789 We're looking at how a government initiative 00:00:58.789 --> 00:01:02.789 that was designed to, you know, educate the public 00:01:02.789 --> 00:01:05.890 and generate billions of dollars somehow ended 00:01:05.890 --> 00:01:09.590 up creating a stockpile of unwanted money so 00:01:09.590 --> 00:01:12.629 massive that it practically became a logistical 00:01:12.629 --> 00:01:16.969 crisis. And to really understand how we got to 00:01:16.969 --> 00:01:19.230 that billion -dollar stockpile, we have to look 00:01:19.230 --> 00:01:21.930 back at the massive success story that the government 00:01:21.930 --> 00:01:24.569 was, you know, desperately trying to copy. Okay, 00:01:24.629 --> 00:01:26.109 let's unpack this, because the government didn't 00:01:26.109 --> 00:01:28.329 just wake up one day in 2005 with this sudden 00:01:28.329 --> 00:01:30.730 passion for presidential trivia. No, not at all. 00:01:30.769 --> 00:01:32.849 They were chasing a high. Exactly. They were 00:01:32.849 --> 00:01:35.170 chasing the high of the 50 state quarters program. 00:01:35.689 --> 00:01:37.810 So the presidential one dollar coin act was authorized 00:01:37.810 --> 00:01:40.629 in December 2005. Right. And it officially launched 00:01:40.629 --> 00:01:43.810 in 2007. Right. And the fundamental blueprint 00:01:43.810 --> 00:01:46.530 was to release this series of one dollar coins 00:01:46.530 --> 00:01:49.010 featuring relief portraits of U .S. presidents 00:01:49.010 --> 00:01:51.290 on the front. You know the obverse and the Statue 00:01:51.290 --> 00:01:53.090 of Liberty on the back. The reverse. And they 00:01:53.090 --> 00:01:54.870 plan to release them in chronological order. 00:01:54.890 --> 00:01:57.129 Right. Like starting with George Washington and 00:01:57.129 --> 00:01:59.469 dropping four new designs a year. Exactly. For 00:01:59.469 --> 00:02:02.340 a year. Which is exactly the cadence of the state 00:02:02.340 --> 00:02:04.019 quarters. I mean, everyone remembers having those 00:02:04.019 --> 00:02:06.019 little cardboard maps to push the quarters into. 00:02:06.200 --> 00:02:08.319 Oh yeah, people went absolutely crazy for them. 00:02:08.629 --> 00:02:11.469 They really did. The Mint knew the public loved 00:02:11.469 --> 00:02:14.770 a collectible series, but more importantly, the 00:02:14.770 --> 00:02:16.990 Treasury loved the math behind it. Right, the 00:02:16.990 --> 00:02:20.250 money. Yeah. That quarter program generated about 00:02:20.250 --> 00:02:25.409 $6 .3 billion in seniorage between 1999 and 2008. 00:02:25.650 --> 00:02:27.349 Wait, seniorage, can you break that down real 00:02:27.349 --> 00:02:30.669 quick? Sure. So seniorage is basically the financial 00:02:30.669 --> 00:02:33.030 mechanism where the government profits from the 00:02:33.030 --> 00:02:35.669 difference between the face value of a coin and 00:02:35.669 --> 00:02:37.936 what it actually costs the Mint to physically... 00:02:37.930 --> 00:02:42.210 produce it. Oh, wow. So because people were hoarding 00:02:42.210 --> 00:02:44.729 these state quarters in their personal collections 00:02:44.729 --> 00:02:46.629 instead of actually spending them, they were 00:02:46.629 --> 00:02:48.629 effectively giving the government billions of 00:02:48.629 --> 00:02:51.250 dollars in interest -free loans. So the government 00:02:51.250 --> 00:02:54.930 looked at that $6 .3 billion and basically acted 00:02:54.930 --> 00:02:57.370 like a Hollywood movie studio green lighting 00:02:57.370 --> 00:02:59.949 a sequel. Pretty much, yeah. They saw the state 00:02:59.949 --> 00:03:02.069 quarters make all that money and just thought, 00:03:02.110 --> 00:03:03.969 you know, let's just swap out the states for 00:03:03.969 --> 00:03:05.949 presidents. It's a guaranteed blockbuster. That 00:03:05.949 --> 00:03:08.629 was the literal logic. They assumed the magic 00:03:08.629 --> 00:03:11.409 was entirely in the rotating design. Yeah. Just 00:03:11.409 --> 00:03:13.909 completely ignoring the fact that people actually 00:03:13.909 --> 00:03:16.229 use quarters every single day, whereas nobody 00:03:16.229 --> 00:03:18.780 uses dollar coin. Right. And the legislation 00:03:18.780 --> 00:03:21.900 explicitly laid out that hope. I mean, the act 00:03:21.900 --> 00:03:24.080 stated that the appeal of changing the design 00:03:24.080 --> 00:03:27.000 would increase public demand for a new coin while 00:03:27.000 --> 00:03:31.139 simultaneously serving as this pocket sized history 00:03:31.139 --> 00:03:34.000 lesson for you, the public. But, you know, getting 00:03:34.000 --> 00:03:36.419 a bill through Congress is never just a straight 00:03:36.419 --> 00:03:39.039 line from a good idea to a finished product. 00:03:39.259 --> 00:03:41.719 No, it never is. We have to look at the legislative 00:03:41.719 --> 00:03:44.009 blueprint for this coin. Because this is where 00:03:44.009 --> 00:03:46.430 the political compromises actually start to dictate 00:03:46.430 --> 00:03:48.689 the physical shape of the metal. Yeah, and the 00:03:48.689 --> 00:03:51.110 biggest compromise in that 2005 act actually 00:03:51.110 --> 00:03:53.469 stems from the failure of the previous dollar 00:03:53.469 --> 00:03:56.009 coin. The Sacagawea dollar. Exactly. The Sacagawea 00:03:56.009 --> 00:03:58.729 dollar, which launched back in 2000, it just 00:03:58.729 --> 00:04:01.090 never caught on in widespread circulation. Yeah, 00:04:01.090 --> 00:04:04.330 I rarely ever see those. Most people don't. But 00:04:04.330 --> 00:04:07.250 the Sacagawea dollar had a very powerful, very 00:04:07.250 --> 00:04:10.490 vocal constituency, which was the North Dakota 00:04:10.490 --> 00:04:13.969 congressional delegation. They viewed Sacagawea 00:04:13.969 --> 00:04:16.790 as a local hero and a point of immense state 00:04:16.790 --> 00:04:20.680 pride. So just to be clear To get the votes necessary 00:04:20.680 --> 00:04:23.759 to pass the new presidential coin act, they had 00:04:23.759 --> 00:04:27.399 to appease North Dakota. Yes, exactly. The law 00:04:27.399 --> 00:04:30.240 literally mandated that the Mint had to continue 00:04:30.240 --> 00:04:33.160 producing Sacagawea dollars alongside the new 00:04:33.160 --> 00:04:35.779 presidential dollar. It did. Originally, the 00:04:35.779 --> 00:04:38.120 recipe stated that at least one in three issued 00:04:38.120 --> 00:04:41.100 dollar coins absolutely must be a Sacagawea dollar. 00:04:41.180 --> 00:04:43.560 Wait, really? One in three? Yeah. They later 00:04:43.560 --> 00:04:46.120 reduced that to one in five, but the strict production 00:04:46.120 --> 00:04:48.100 quota remained in place. OK, wait, let me push 00:04:48.100 --> 00:04:50.470 back on. logic here. So the solution to a coin 00:04:50.470 --> 00:04:53.750 nobody wanted was to create a new coin, but legally 00:04:53.750 --> 00:04:55.870 force the mint to keep making the old coin nobody 00:04:55.870 --> 00:04:58.449 wanted, just in case. Yeah, that's about the 00:04:58.449 --> 00:05:00.449 size of it. How does that solve the underlying 00:05:00.449 --> 00:05:03.230 issue of Americans just preferring paper bills? 00:05:03.589 --> 00:05:05.829 If we connect this to the bigger picture of how 00:05:05.829 --> 00:05:08.970 legislation is crafted, it doesn't solve the 00:05:08.970 --> 00:05:12.129 issue at all. It is pure political log rolling. 00:05:12.569 --> 00:05:14.870 And the Federal Reserve actually saw this train 00:05:14.870 --> 00:05:16.569 wreck coming from a mile away. Oh, they did? 00:05:16.689 --> 00:05:20.370 Oh, yeah. They explicitly warned Congress, stating 00:05:20.370 --> 00:05:23.029 on the record that if the new presidential program 00:05:23.029 --> 00:05:26.189 didn't stimulate substantial organic demand, 00:05:26.870 --> 00:05:29.750 forcing the mint to keep cranking out Sacagawea 00:05:29.750 --> 00:05:32.649 dollars would just result in massive storage 00:05:32.649 --> 00:05:34.730 costs and waste for the taxpayer. We're just 00:05:34.730 --> 00:05:36.389 trying to impartially report what the sources 00:05:36.389 --> 00:05:38.689 say here, but it's wild to see how the politics 00:05:38.689 --> 00:05:41.170 of the moment just totally won out over the economic 00:05:41.170 --> 00:05:43.670 warning. They needed the votes, so the quota 00:05:43.670 --> 00:05:47.000 went into the bill. Wow. Exactly. When political 00:05:47.000 --> 00:05:49.579 mandates went far beyond just production quotas, 00:05:49.920 --> 00:05:52.500 they dictated the exact microscopic composition 00:05:52.500 --> 00:05:54.519 of the coin itself. Right, because of the vending 00:05:54.519 --> 00:05:57.259 machines. Yes. To ensure the new presidential 00:05:57.259 --> 00:05:59.540 coins would actually work in existing vending 00:05:59.540 --> 00:06:02.279 machines and transit systems, they had to be 00:06:02.279 --> 00:06:05.180 electromagnetically identical to the old silver 00:06:05.180 --> 00:06:08.060 -colored Susan B. Anthony dollar from the late 00:06:08.060 --> 00:06:10.920 1970s. Because, yeah, a vending machine doesn't 00:06:10.920 --> 00:06:14.100 look at the picture on the coin. It runs a magnetic 00:06:14.100 --> 00:06:16.579 current through the metal to check its density 00:06:16.579 --> 00:06:18.779 and composition. Right, it's checking the signature. 00:06:18.959 --> 00:06:21.560 So if the new coin didn't match the old coin's 00:06:21.560 --> 00:06:24.180 signature perfectly, every single subway turnstile 00:06:24.180 --> 00:06:26.680 in America would just spit it back out. Exactly. 00:06:27.199 --> 00:06:29.939 So to achieve that identical electromagnetic 00:06:29.939 --> 00:06:31.980 signature while still giving it a totally new 00:06:31.980 --> 00:06:35.620 look, they gave the presidential coin a pure 00:06:35.620 --> 00:06:39.000 copper core. Okay. And then they clad it in this 00:06:39.000 --> 00:06:43.029 very specific manganese brass alloy. We are talking 00:06:43.029 --> 00:06:48.329 exactly 77 % copper, 12 % zinc, 7 % manganese, 00:06:48.430 --> 00:06:51.370 and 4 % nickel. That is incredibly specific. 00:06:51.449 --> 00:06:53.709 It had to be. That specific chemistry is what 00:06:53.709 --> 00:06:56.750 gives the coin its distinctive golden color while 00:06:56.750 --> 00:06:59.129 simultaneously tricking the machines into thinking 00:06:59.129 --> 00:07:01.350 it's just a Susan B. Anthony dollar. There is 00:07:01.350 --> 00:07:03.589 also this fascinating omission on the design 00:07:03.589 --> 00:07:05.829 itself. Like if you look closely at one of these 00:07:05.829 --> 00:07:07.990 coins, the word liberty is just entirely absent. 00:07:08.230 --> 00:07:10.930 Which is incredibly rare for American currency. 00:07:11.250 --> 00:07:13.550 But lawmakers decided that since the reverse 00:07:13.550 --> 00:07:16.370 of the coin featured this giant engraving of 00:07:16.370 --> 00:07:19.329 the Statue of Liberty, which is, you know, formerly 00:07:19.329 --> 00:07:22.089 known as Liberty and Lightning World, the visual 00:07:22.089 --> 00:07:25.430 image itself was sufficient to convey the concept. 00:07:25.750 --> 00:07:27.509 They just felt they didn't need to actually spell 00:07:27.509 --> 00:07:30.290 the word out. Right. So the mint has this incredibly 00:07:30.290 --> 00:07:32.829 specific metal recipe. They have the political 00:07:32.829 --> 00:07:34.959 compromises all along. They have the designs. 00:07:35.699 --> 00:07:38.300 But moving from the theoretical blueprint to 00:07:38.300 --> 00:07:40.920 the actual physical reality of stamping millions 00:07:40.920 --> 00:07:43.620 of these out of metal is where this ambitious 00:07:43.620 --> 00:07:45.839 project just immediately ran into total chaos. 00:07:46.120 --> 00:07:48.300 Oh, absolute chaos. The physical production is 00:07:48.300 --> 00:07:50.639 where things really fell apart, specifically 00:07:50.639 --> 00:07:53.720 because of one highly ambitious design choice. 00:07:54.040 --> 00:07:56.060 The edge lettering. The edge lettering. I love 00:07:56.060 --> 00:07:58.379 this detail because it is such a cool historical 00:07:58.379 --> 00:08:02.519 callback. It really is. The act mandated that 00:08:02.519 --> 00:08:05.660 the year, the mint mark, 13 stars, and the mottoes, 00:08:05.699 --> 00:08:08.600 e pluribus unum, and in God we trust, be inscribed 00:08:08.600 --> 00:08:11.100 along the edge of the coin, not the face. Which 00:08:11.100 --> 00:08:13.959 is a huge shift. A massive shift. It was actually 00:08:13.959 --> 00:08:16.079 the first time since the St. Godden's double 00:08:16.079 --> 00:08:19.319 eagle gold coin back in the 1930s that the U 00:08:19.319 --> 00:08:21.740 .S. issued a circulating coin with edge lettering. 00:08:21.899 --> 00:08:24.800 And historically, like going back to the 1790s, 00:08:24.879 --> 00:08:27.420 they didn't do edge lettering just to look pretty. 00:08:27.540 --> 00:08:29.720 It was actually a functional security feature. 00:08:29.800 --> 00:08:32.440 Right, because of the metal value. Yeah. Back 00:08:32.440 --> 00:08:34.860 when coins were made of actual precious metals 00:08:34.860 --> 00:08:37.720 like gold and silver, people would literally 00:08:37.720 --> 00:08:40.259 shave off tiny amounts of metal from the edges 00:08:40.259 --> 00:08:42.879 before spending them. Just hoarding the shaving. 00:08:43.139 --> 00:08:45.460 Exactly. If you shaved enough coins, you'd eventually 00:08:45.460 --> 00:08:47.620 have enough gold dust to melt down and sell. 00:08:48.340 --> 00:08:50.480 So by putting elaborate lettering on the edge, 00:08:51.259 --> 00:08:53.240 anyone accepting the coin could instantly tell 00:08:53.240 --> 00:08:55.200 if it had been shaved or tampered with. That's 00:08:55.200 --> 00:08:58.210 right. But for the presidential dollars in 2007, 00:08:58.710 --> 00:09:01.289 the edge lettering was purely an aesthetic choice. 00:09:01.830 --> 00:09:04.269 They moved the text to the edge just to clean 00:09:04.269 --> 00:09:06.610 up the face of the coin, allowing the presidential 00:09:06.610 --> 00:09:09.009 portraits to be larger and more detailed. But 00:09:09.009 --> 00:09:12.710 that aesthetic choice completely broke the manufacturing 00:09:12.710 --> 00:09:15.169 process. It really did. Because applying lettering 00:09:15.169 --> 00:09:17.919 to the edge of a coin requires a totally separate 00:09:17.919 --> 00:09:20.460 step in the minting sequence. The coin has to 00:09:20.460 --> 00:09:22.639 be stamped with the faces and then physically 00:09:22.639 --> 00:09:25.220 moved into another machine to roll the text onto 00:09:25.220 --> 00:09:27.620 the side. And that transition was the major point 00:09:27.620 --> 00:09:31.100 of failure. In February 2007, right at the launch 00:09:31.100 --> 00:09:34.730 of the program, an estimated 50 thousand George 00:09:34.730 --> 00:09:37.750 Washington coins escaped the Philadelphia Mint, 00:09:38.309 --> 00:09:40.429 having completely skipped that second machine. 00:09:40.870 --> 00:09:43.149 50 ,000 of them. Yeah. They went out into the 00:09:43.149 --> 00:09:45.649 world completely missing their edge lettering. 00:09:45.710 --> 00:09:48.289 Which means they were missing the year, the mint 00:09:48.289 --> 00:09:51.590 mark, and most notably, the mottos. And because 00:09:51.590 --> 00:09:54.429 one of those missing mottos was, in God we trust, 00:09:54.950 --> 00:09:57.490 the media and collectors immediately dubbed them 00:09:57.610 --> 00:10:00.750 The godless dollars. The collector's market completely 00:10:00.750 --> 00:10:03.370 lost its mind over this error. Oh, I bet. The 00:10:03.370 --> 00:10:05.929 first discovered godless dollar sold on eBay 00:10:05.929 --> 00:10:08.889 for six hundred dollars. Six hundred for a one 00:10:08.889 --> 00:10:11.090 dollar coin. Yeah. Now, eventually, as people 00:10:11.090 --> 00:10:13.029 realized there were tens of thousands of them 00:10:13.029 --> 00:10:15.389 out there, the price settled down to around 40 00:10:15.389 --> 00:10:17.470 to 60 dollars. Still a pretty good return on 00:10:17.470 --> 00:10:19.710 investment. Right. But the Philadelphia Mint 00:10:19.710 --> 00:10:22.370 wasn't the only one having issues. When they 00:10:22.370 --> 00:10:24.850 moved on to the second president. John Adams, 00:10:25.370 --> 00:10:27.990 the minting machines had the exact opposite problem. 00:10:28.169 --> 00:10:31.149 Oh no. What happened? Instead of missing the 00:10:31.149 --> 00:10:33.830 edge lettering machine entirely, some of the 00:10:33.830 --> 00:10:36.789 John Adams coins passed through it twice. You're 00:10:36.789 --> 00:10:39.509 kidding. Nope. So you had coins with double edge 00:10:39.509 --> 00:10:42.129 lettering. Sometimes the text was overlapped 00:10:42.129 --> 00:10:44.730 in a jumble and sometimes it was inverted, meaning 00:10:44.730 --> 00:10:47.230 the second pass of text was printed upside down 00:10:47.230 --> 00:10:50.250 relative to the first pass. My absolute favorite. 00:10:50.460 --> 00:10:53.120 Error if you can even call it that is from a 00:10:53.120 --> 00:10:56.919 couple in Colorado. Oh the blank one Yes, they 00:10:56.919 --> 00:10:59.419 found a coin that had the edge lettering perfectly 00:10:59.419 --> 00:11:02.429 applied But the coin itself was completely blank. 00:11:02.990 --> 00:11:05.029 It somehow skipped the main stamping presses 00:11:05.029 --> 00:11:07.590 entirely, but magically made it into the edge 00:11:07.590 --> 00:11:09.990 lettering machine. It's hilarious. But honestly, 00:11:10.129 --> 00:11:12.070 the most absurd part of the collector frenzy 00:11:12.070 --> 00:11:14.470 wasn't the real mechanical errors. It was the 00:11:14.470 --> 00:11:17.549 fake one. Yes, the upside down lettering scam. 00:11:18.090 --> 00:11:19.690 Here's where it gets really interesting, because 00:11:19.690 --> 00:11:21.769 it shows how a little bit of missing information 00:11:21.769 --> 00:11:24.669 can just create a massive grift. because of how 00:11:24.669 --> 00:11:26.929 that secondary edge lettering machine worked, 00:11:27.370 --> 00:11:30.169 it created this hilarious fake error market. 00:11:30.769 --> 00:11:32.649 The coins would be stamped with the president's 00:11:32.649 --> 00:11:35.110 face and then they would just drop into a hopper 00:11:35.110 --> 00:11:36.769 to go into the edge lettering machine. Right. 00:11:36.909 --> 00:11:39.409 They dropped in completely randomly face up or 00:11:39.409 --> 00:11:43.230 face down. That means on exactly 50 percent of 00:11:43.230 --> 00:11:46.429 all the presidential dollars ever minted, if 00:11:46.429 --> 00:11:48.950 you hold the president's face upright, the edge 00:11:48.950 --> 00:11:51.049 lettering will be right side up. Naturally. And 00:11:51.049 --> 00:11:53.360 on the other 50 percent, it will naturally be 00:11:53.360 --> 00:11:55.980 upside down. It is just simple probability, a 00:11:55.980 --> 00:11:58.820 completely normal intended variation of the minting 00:11:58.820 --> 00:12:01.720 process. But scammers went on Amazon and eBay 00:12:01.720 --> 00:12:04.759 and started listing the upside down ones as rare 00:12:04.759 --> 00:12:07.059 upside down error coins. Which is so funny. They're 00:12:07.059 --> 00:12:09.200 actually selling them to unsuspecting buyers 00:12:09.200 --> 00:12:13.200 for a massive premium over their $1 face value. 00:12:13.519 --> 00:12:16.019 It's exactly like flipping a quarter, having 00:12:16.019 --> 00:12:18.419 a land on tails, and then trying to sell it as 00:12:18.419 --> 00:12:20.809 a rare tail side up quarter. It is brilliant 00:12:20.809 --> 00:12:23.529 in its audacity, but it really highlights the 00:12:23.529 --> 00:12:25.750 informational chaos surrounding the whole launch. 00:12:26.190 --> 00:12:29.090 But honestly, doesn't this show that the only 00:12:29.090 --> 00:12:31.470 people actually paying attention to this billion 00:12:31.470 --> 00:12:35.009 -dollar educational program were numismatic speculators 00:12:35.009 --> 00:12:37.909 and internet scammers? Yeah, pretty much. The 00:12:37.909 --> 00:12:39.769 general public wasn't using them to buy coffee. 00:12:39.830 --> 00:12:42.230 They just didn't care. That is the harsh truth. 00:12:42.850 --> 00:12:45.230 The public treated them as a novelty, not as 00:12:45.230 --> 00:12:48.129 actual money. And that lack of public interest 00:12:48.129 --> 00:12:50.350 leads us directly to the physical consequences 00:12:50.350 --> 00:12:52.169 of the program. Because they couldn't just stop 00:12:52.169 --> 00:12:54.590 making them, right? Exactly. Because while the 00:12:54.590 --> 00:12:57.029 public was ignoring them, the United States Mint 00:12:57.029 --> 00:12:59.789 was still legally obligated to produce them by 00:12:59.789 --> 00:13:02.289 the millions quarter after quarter. So the public 00:13:02.289 --> 00:13:04.789 is completely ignoring them, but the legislative 00:13:04.789 --> 00:13:07.629 machine can't just be unplugged. The Mint is 00:13:07.629 --> 00:13:09.850 legally bound to keep stamping these golden coins 00:13:09.850 --> 00:13:13.389 out, which triggers an inevitable physical crisis. 00:13:13.549 --> 00:13:15.889 Right. Where do they all go? They bypass the 00:13:15.889 --> 00:13:18.629 cash registers entirely and went straight from 00:13:18.629 --> 00:13:20.990 the mint into the heavily guarded vaults of the 00:13:20.990 --> 00:13:24.590 Federal Reserve. Wow. By 2011, just four years 00:13:24.590 --> 00:13:27.230 into the program, the Federal Reserve had amassed 00:13:27.230 --> 00:13:30.730 a staggering stockpile of one point four billion 00:13:30.730 --> 00:13:33.970 uncirculated one dollar coins. One point four 00:13:33.970 --> 00:13:37.409 billion coins. I mean, that isn't just a number 00:13:37.409 --> 00:13:39.879 on a spreadsheet. That is a physical nightmare. 00:13:39.940 --> 00:13:42.740 It's unbelievable. We are talking about reinforced 00:13:42.740 --> 00:13:46.320 concrete floors just groaning under the weight 00:13:46.320 --> 00:13:49.360 of thousands of tons of brass. To give you a 00:13:49.360 --> 00:13:51.600 sense of scale, the reports noted that if you 00:13:51.600 --> 00:13:55.960 laid those 1 .4 billion coins flat, edge to edge, 00:13:56.539 --> 00:13:58.860 they would stretch all the way from Los Angeles 00:13:58.860 --> 00:14:02.100 to Chicago. That is insane. And the internal 00:14:02.100 --> 00:14:04.879 projections were grim. If they didn't halt production, 00:14:05.279 --> 00:14:07.440 that stockpile was projected to hit two billion 00:14:07.440 --> 00:14:10.820 coins by 2016. That is literal physical money 00:14:10.820 --> 00:14:13.080 being wasted by the sheer act of manufacturing 00:14:13.080 --> 00:14:15.429 and storing it. Yeah. But there is a massive 00:14:15.429 --> 00:14:17.570 financial irony buried in this failure, isn't 00:14:17.570 --> 00:14:19.350 there? Because mathematically, the coin wasn't 00:14:19.350 --> 00:14:21.370 actually a bad idea. No, the math heavily favored 00:14:21.370 --> 00:14:23.769 the coin. A report by the Government Accountability 00:14:23.769 --> 00:14:26.570 Office, the GAO, looked at the numbers and concluded 00:14:26.570 --> 00:14:29.990 that discontinuing the paper $1 bill in favor 00:14:29.990 --> 00:14:32.769 of the $1 coin would actually save the U .S. 00:14:33.049 --> 00:14:36.210 government about $5 .5 billion over a 30 -year 00:14:36.210 --> 00:14:38.370 period. And that mechanism comes entirely down 00:14:38.370 --> 00:14:40.669 to durability, right? Exactly. A paper dollar 00:14:40.669 --> 00:14:43.149 bill gets passed around constantly. It's crumpled 00:14:43.149 --> 00:14:46.169 in pockets, torn in vending machines. It only 00:14:46.169 --> 00:14:48.750 lasts an average of maybe 18 months to two years 00:14:48.750 --> 00:14:51.250 in circulation before the Federal Reserve has 00:14:51.250 --> 00:14:53.710 to pull it, shred it, and print a replacement. 00:14:53.870 --> 00:14:56.070 It's a very short lifespan. Whereas a metal coin, 00:14:56.090 --> 00:14:58.429 on the other hand, can stay in circulation for 00:14:58.429 --> 00:15:01.710 decades. So even though the coin costs more to 00:15:01.710 --> 00:15:04.690 manufacture initially, the long -term savings 00:15:04.690 --> 00:15:07.809 of not constantly replacing paper are just enormous. 00:15:07.990 --> 00:15:10.250 The savings are huge. So what does this all mean 00:15:10.250 --> 00:15:13.049 for you the listener we hear about government 00:15:13.049 --> 00:15:15.470 waste all the time But this seems like a completely 00:15:15.470 --> 00:15:17.610 solvable problem, right? They did it in Europe 00:15:17.610 --> 00:15:20.110 with euro coins. They did it in Canada with the 00:15:20.110 --> 00:15:22.870 loony They just stopped making the paper bills 00:15:22.870 --> 00:15:26.070 and forced the public to use the coins Why do 00:15:26.070 --> 00:15:28.730 you think American lawmakers refused to just 00:15:28.730 --> 00:15:31.230 eliminate the paper dollar bill to force the 00:15:31.230 --> 00:15:33.730 issue? It really is a fascinating case study 00:15:33.730 --> 00:15:36.830 in the friction between cultural habits and economic 00:15:36.830 --> 00:15:40.990 efficiency. Americans simply love the paper dollar 00:15:40.990 --> 00:15:43.490 bill. It is lightweight, it folds neatly into 00:15:43.490 --> 00:15:46.070 a wallet, and it is deeply ingrained in the culture. 00:15:46.350 --> 00:15:48.870 People are used to it. And politicians are highly 00:15:48.870 --> 00:15:51.950 sensitive to that kind of cultural inertia. No 00:15:51.950 --> 00:15:54.250 politician wanted to run for reelection as the 00:15:54.250 --> 00:15:57.909 person who took away the dollar bill and forced 00:15:57.909 --> 00:16:01.070 Americans to walk around with heavy pockets full 00:16:00.970 --> 00:16:04.190 of jangling change. So because they lacked the 00:16:04.190 --> 00:16:06.610 political will to retire the paper bill, the 00:16:06.610 --> 00:16:09.269 newly minted coins were just forced into a system 00:16:09.269 --> 00:16:11.629 that didn't need them and didn't want them. Exactly. 00:16:11.690 --> 00:16:13.710 Turning a potential five point five billion dollar 00:16:13.710 --> 00:16:16.750 savings to a massive sum cost. And eventually. 00:16:17.159 --> 00:16:21.419 The optics of this giant vault of unwanted money 00:16:21.419 --> 00:16:24.059 just got too bad for the administration to ignore. 00:16:24.279 --> 00:16:27.320 I could imagine. In December 2011, Vice President 00:16:27.320 --> 00:16:30.379 Joe Biden and Treasury Secretary Timothy Geithner 00:16:30.379 --> 00:16:32.740 officially suspended the circulation program. 00:16:32.980 --> 00:16:34.940 OK, so they finally pulled the plug. They did. 00:16:35.059 --> 00:16:37.000 They announced that going forward, starting with 00:16:37.000 --> 00:16:39.899 the 21st president, Chester A. Arthur, the coins 00:16:39.899 --> 00:16:43.379 would only be minted in very small custom batches 00:16:43.379 --> 00:16:45.340 specifically for collectors who wanted to complete 00:16:45.340 --> 00:16:47.610 their sets. They essentially turned off the faucet. 00:16:48.169 --> 00:16:50.350 But did that actually fix the stockpile? Slowly. 00:16:51.129 --> 00:16:54.100 Very, very slow. How slowly? Well, by the end 00:16:54.100 --> 00:16:57.519 of 2022, the stockpile of dollar coins had dwindled 00:16:57.519 --> 00:17:01.080 from 1 .4 billion down to about 888 million. 00:17:01.259 --> 00:17:03.899 That's still almost a billion coins. Right. The 00:17:03.899 --> 00:17:05.700 Federal Reserve estimates that the remaining 00:17:05.700 --> 00:17:08.980 inventory will last them for nearly 16 more years, 00:17:09.380 --> 00:17:12.180 carrying them all the way to 2038. So we are 00:17:12.180 --> 00:17:14.039 still going to be dealing with the physical hangover 00:17:14.039 --> 00:17:16.640 of this program for another decade. At least. 00:17:17.140 --> 00:17:19.000 But the story doesn't actually end when they 00:17:19.000 --> 00:17:21.910 suspended circulation in 2011. Because this original 00:17:21.910 --> 00:17:25.490 2005 law had all these strange legislative afterlives 00:17:25.490 --> 00:17:27.630 and companion pieces attached to it. It did. 00:17:27.869 --> 00:17:30.069 The law was remarkably rigid about who could 00:17:30.069 --> 00:17:33.180 be on a coin and when. It created some incredibly 00:17:33.180 --> 00:17:35.519 tricky historical puzzles for the mint to solve. 00:17:35.859 --> 00:17:37.400 Let's talk about the two years' deceased rule, 00:17:37.619 --> 00:17:40.079 which is just a fantastic piece of legislative 00:17:40.079 --> 00:17:42.640 tripwiring. Yeah, the act specifically stated 00:17:42.640 --> 00:17:44.599 that for a former president to be honored on 00:17:44.599 --> 00:17:46.759 a coin, they must have been deceased for at least 00:17:46.759 --> 00:17:48.859 two years prior to the time of minting. Right. 00:17:49.140 --> 00:17:52.119 The law explicitly forbade putting a living or 00:17:52.119 --> 00:17:54.359 recently deceased president on a coin. Which 00:17:54.359 --> 00:17:56.660 created a really weird staggered endpoint for 00:17:56.660 --> 00:17:59.240 the series. It did. When the program formally 00:17:59.240 --> 00:18:02.480 reached its planned end in 2016, honoring Ronald 00:18:02.480 --> 00:18:05.460 Reagan as the final eligible president, the Mint 00:18:05.460 --> 00:18:07.900 had to skip several presidencies. Because they 00:18:07.900 --> 00:18:10.619 were still alive. Exactly. Jimmy Carter, Bill 00:18:10.619 --> 00:18:13.640 Clinton, George W. Bush, and the sitting president 00:18:13.640 --> 00:18:16.240 at the time, Barack Obama, were all skipped because 00:18:16.240 --> 00:18:18.240 they were still living. So if you want to add 00:18:18.240 --> 00:18:20.160 a skipped president later, you can't just have 00:18:20.160 --> 00:18:22.400 the Mint spin the machines back up. No, you can't. 00:18:22.440 --> 00:18:25.420 It requires a completely new, literal act of 00:18:25.420 --> 00:18:27.990 Congress to amend the program. Yes. And we've 00:18:27.990 --> 00:18:30.190 seen this happen, right? Following the passing 00:18:30.190 --> 00:18:32.950 of George H .W. Bush, Congress had to pass a 00:18:32.950 --> 00:18:36.710 specific bill signed into law in early 2020 just 00:18:36.710 --> 00:18:39.069 to authorize a presidential dollar honoring him. 00:18:39.329 --> 00:18:41.430 Right, they had to legally add him back in. And 00:18:41.430 --> 00:18:44.670 more recently, in early 2025, following the death 00:18:44.670 --> 00:18:47.309 of Jimmy Carter, a new bill was introduced in 00:18:47.309 --> 00:18:49.569 the Senate to extend the program for him as well. 00:18:49.680 --> 00:18:51.900 And that rigid structure also applied to the 00:18:51.900 --> 00:18:54.359 first spouse program, which was created by the 00:18:54.359 --> 00:18:58.000 exact same 2005 law and is honestly a whole other 00:18:58.000 --> 00:19:00.519 level of complicated. The first spouse program 00:19:00.519 --> 00:19:04.299 was wild. It mandated the issuance of half ounce, 00:19:04.539 --> 00:19:07.339 ten dollar gold coins featuring the images of 00:19:07.339 --> 00:19:09.680 the spouses of the presidents. Yeah. And they 00:19:09.680 --> 00:19:11.660 had to be released on the exact same schedule 00:19:11.660 --> 00:19:14.359 as the presidential dollars. Solid gold coins. 00:19:14.640 --> 00:19:16.740 They were intended purely for the collector's 00:19:16.740 --> 00:19:18.940 market, not for circulation, and their prices 00:19:18.940 --> 00:19:21.440 fluctuated wildly with the global gold market. 00:19:21.559 --> 00:19:24.000 Right, because the price of gold changes daily. 00:19:24.359 --> 00:19:27.539 Exactly. The mint was often selling them for 00:19:27.539 --> 00:19:31.579 well over $400 or even $700 each. But applying 00:19:31.579 --> 00:19:34.420 stripped rules to 200 years of marital history 00:19:34.420 --> 00:19:37.660 created some really weird problems. Because what 00:19:37.660 --> 00:19:39.680 happens if a president wasn't married? Right. 00:19:40.099 --> 00:19:42.660 Four presidents served their terms while unmarried. 00:19:42.829 --> 00:19:45.789 The law dictated that for those specific presidencies, 00:19:45.930 --> 00:19:48.569 the gold coin couldn't just be blank. It had 00:19:48.569 --> 00:19:51.369 to feature an obverse image emblematic of liberty 00:19:51.369 --> 00:19:54.109 as depicted on a circulating coin from that specific 00:19:54.109 --> 00:19:57.190 historical era rather than a portrait of a person. 00:19:57.329 --> 00:19:59.589 But there is one exception to that generic liberty 00:19:59.589 --> 00:20:01.690 rule that I absolutely love. Oh, the Alice Paul 00:20:01.690 --> 00:20:05.930 exception. Yes, the Alice Paul exception. So 00:20:05.930 --> 00:20:09.549 Chester A. Arthur was a widower. His wife Ellen 00:20:09.549 --> 00:20:12.769 died before he took office. But instead of just 00:20:12.769 --> 00:20:15.509 defaulting to another generic liberty design 00:20:15.509 --> 00:20:18.309 for his slot in the schedule, the law explicitly 00:20:18.309 --> 00:20:20.789 stated that his companion coin would feature 00:20:20.789 --> 00:20:23.930 Alice Paul. Alice Paul, who was a famous leader 00:20:23.930 --> 00:20:26.809 in the women's suffrage movement. He was incredibly 00:20:26.809 --> 00:20:29.009 instrumental in the passage of the 19th Amendment, 00:20:29.109 --> 00:20:31.410 which gave women the right to vote. And the connection 00:20:31.410 --> 00:20:35.009 is that she was born in 1885, right during Arthur's 00:20:35.009 --> 00:20:38.559 presidency. So, because he happened to be a widower, 00:20:38.980 --> 00:20:42.480 lawmakers used that blank slate to insert an 00:20:42.480 --> 00:20:44.779 incredible tribute to a major civil rights leader 00:20:44.779 --> 00:20:47.220 right into the middle of the First Spouse program. 00:20:47.480 --> 00:20:50.319 It really is a genuinely cool historical workaround. 00:20:50.579 --> 00:20:52.319 Yeah, it's amazing. And this really raises an 00:20:52.319 --> 00:20:54.559 important question about how legislation actually 00:20:54.559 --> 00:20:57.380 functions in practice. Because this 2005 act 00:20:57.380 --> 00:20:59.440 didn't just stop at the Presidents, the First 00:20:59.440 --> 00:21:01.759 Spouses, and the Sacagawea quotas. No, it is 00:21:01.759 --> 00:21:04.160 the ultimate example of a legislative Christmas 00:21:04.160 --> 00:21:06.019 tree. That's what they call it. When a bill starts 00:21:06.019 --> 00:21:08.700 out as one core idea, the trunk of the tree, 00:21:09.119 --> 00:21:11.539 and then every politician starts hanging their 00:21:11.539 --> 00:21:13.380 own pet projects onto it like ornaments. Which 00:21:13.380 --> 00:21:15.220 is exactly what happened here. You have the main 00:21:15.220 --> 00:21:17.240 branch, which is the presidential dollar, but 00:21:17.240 --> 00:21:20.539 then someone says, we need a Sacagawea quota 00:21:20.539 --> 00:21:24.240 to appease North Dakota. We need solid gold coins 00:21:24.240 --> 00:21:26.839 for the first spouses. And they didn't stop there. 00:21:27.019 --> 00:21:31.460 No. This exact same bill mandated a total redesign 00:21:31.460 --> 00:21:34.759 of the Lincoln penny for its 2009 bicentennial, 00:21:34.859 --> 00:21:37.259 requiring four different designs showing the 00:21:37.259 --> 00:21:39.609 stages of his life. Right. and it authorized 00:21:39.609 --> 00:21:43.730 the creation of the $50 American Buffalo gold 00:21:43.730 --> 00:21:46.890 bullion coin. The bill just became a catch -all 00:21:46.890 --> 00:21:49.529 vehicle for a dozen different numismatic projects. 00:21:49.769 --> 00:21:51.690 They tied all these separate ambitions together 00:21:51.690 --> 00:21:54.990 into one massive unwieldy law. They really did. 00:21:55.170 --> 00:21:56.670 So looking at this whole journey, we're looking 00:21:56.670 --> 00:21:59.430 at a program. that started with the best of intentions. 00:22:00.210 --> 00:22:02.329 The presidential $1 coin program was supposed 00:22:02.329 --> 00:22:04.450 to be a shortcut to a more efficient economy, 00:22:05.049 --> 00:22:08.609 saving taxpayers $5 .5 billion, while giving 00:22:08.609 --> 00:22:10.250 everyone a little history lesson right in their 00:22:10.250 --> 00:22:13.349 pocket. But instead, it became a master class 00:22:13.349 --> 00:22:15.789 in the absolute limits of government design. 00:22:16.430 --> 00:22:19.349 It proves that you cannot simply legislate consumer 00:22:19.349 --> 00:22:22.180 behavior. You can mandate the alloy, you can 00:22:22.180 --> 00:22:23.839 mandate the edge lettering, and you can build 00:22:23.839 --> 00:22:26.960 a massive legislative Christmas tree. But if 00:22:26.960 --> 00:22:29.019 the public doesn't want to carry a heavy coin, 00:22:29.579 --> 00:22:32.380 no amount of historical engravings or political 00:22:32.380 --> 00:22:34.460 maneuvering is going to force them to use it. 00:22:34.559 --> 00:22:37.059 It just stands as a billion -dollar physical 00:22:37.059 --> 00:22:40.420 monument to the undeniable power of the paper 00:22:40.420 --> 00:22:42.299 dollar bill. Which leaves us with a lingering 00:22:42.299 --> 00:22:45.140 question, one that extends far beyond the vaults 00:22:45.140 --> 00:22:47.380 of the Federal Reserve. What's that? Think about 00:22:47.380 --> 00:22:49.240 the cash in your wallet right now if you even 00:22:49.240 --> 00:22:51.859 have any. We reject coins today because they 00:22:51.859 --> 00:22:54.339 are heavy and inconvenient. But as we rapidly 00:22:54.339 --> 00:22:57.279 move toward a completely cashless society, reliant 00:22:57.279 --> 00:22:59.799 on tapping phones and digital transfers, what 00:22:59.799 --> 00:23:01.819 happens to the physical monuments of our history? 00:23:01.859 --> 00:23:04.279 That's a great point. If a billion shiny new 00:23:04.279 --> 00:23:06.380 coins couldn't make us care about former presidents 00:23:06.380 --> 00:23:09.980 in 2007, will we ever have another physical touchstone 00:23:09.980 --> 00:23:13.000 for our shared history? Or is the era of the 00:23:13.000 --> 00:23:15.880 commemorative coin as a tool for public education 00:23:15.880 --> 00:23:18.380 gone forever? That is definitely something to 00:23:18.380 --> 00:23:20.099 chew on the next time you tap your phone to pay 00:23:20.099 --> 00:23:22.559 for a coffee. Until then, thank you for joining 00:23:22.559 --> 00:23:24.500 us on this deep dive. And seriously, go check 00:23:24.500 --> 00:23:26.380 the change jar in your kitchen if you find a 00:23:26.380 --> 00:23:29.539 presidential dollar. Check the edge. Even if 00:23:29.539 --> 00:23:32.119 the upside down lettering won't make you rich, 00:23:32.640 --> 00:23:34.380 it is still a pretty great piece of history. 00:23:34.640 --> 00:23:35.279 Catch you next time.