Coins for Cash; What We Can Do to Stimulate the Economy

The Federal Reserve, Congress, the President, everyone has solutions on how to boost consumer confidence and the economy. So how can we contribute?

It came to me while rolling coins with my mom over coffee one morning. While the Federal Reserve proposes a ‘twist’ to tweak the economy, I propose injecting it with bundles of coins.

Go ahead… look under sofa cushions, dig deep into desk drawers, car compartment- break open the piggy bank and change jar. It’s a safe bet we all have some change lying around!

It turns out I’m onto something. According to Coinstar, a company that operates coin counting machines, at any given time, there is approximately $10 billion of change out of circulation.  A spokesperson told New England Post this has been pretty consistent for the past five years.  Customers are recognizing the value of the otherwise pesky change in a tough economy.

Let’s say we all collected coins from our home, car, or office and cashed them in. Could we help stimulate the economy by putting the money back into circulation?

Greg Pinto, Chief financial adviser at Baystate Wealth Management in Boston, says not really, but cashing in coins could boost people’s moods. Pinto says with  $4-$7 trillion circulating in the U.S. economy, $10 billion would not make a dent. Plus, Pinto says, whenever the Federal government tries to jump start the economy by putting money back in people’s pockets, they end up paying off credit card debt instead of shopping. He points to the 2011 temporary reduction on employer’s social tax rate which gave most people, a one time 2% pay raise.  He says with all the extra money, people didn’t go on a massive shopping spree and consumer confidence indicators did not spike.

But wouldn’t people feel empowered?  Have a sense that they do have a small say in the health of the economy? Pinto says, “It would give people a sense of enjoyment, a little bit of fun, maybe get a few dinners on those coins”.  He says on an individual level it would definitely make a dent.

For me it certainly did. I took two small zip lock bags full of change, sorted, stacked, stuffed them into little envelopes and made a whopping $200!!!  I saved even more by not using a counting machine at a supermarket or other retail store. Instead I turned it into a ‘project’ with my 3 year old niece.

So I got a little spending money, did my part in pumping some money back into the economy, while giving a future consumer a lesson in coins.

By the way, did you know that it costs 1.79 cents to produce a penny and 9.22 cents or almost twice the buying power of the nickel to make it? Just a little fast fact from the U.S. mint.

Related posts:

1. Apple Has More Cash Than the US Government
2. Oil Drops Under $94 on Concerns of Weak Economy
3. Regulation and the Economy
4. 100% Made in MA: Westford Solar Panel Field Will Help The Bay State’s Economy Shine
5. Oil Below $85 Ahead of Bernanke Speech, Irene

Short URL: http://www.newenglandpost.com/?p=4652

Posted by eszter vajda on Sep 28 2011. Filed under Opinion. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry