A Stitch in Haste

One word: Seigniorage --

Amid the drama of American Indian drumming, singing and dancing, in the presence of the revered American Bison, United States Mint Director Henrietta Holsman Fore presented the new 2005 American Bison nickel to the American people in a Capitol Hill ceremony. [Image.]

"The 2005 American Bison nickel will look significantly different from any nickels you’ve seen," she told the crowd. "It marks the first time that the image of President Jefferson has ever changed on the nickel, and we have the word Liberty in his handwriting." Looking at Cody, the live Buffalo, she added, "There is a beautiful, strong, classic American bison on the reverse."

But wait, there's more:

The post office is giving a nod to the plants and animals of the Northeastern forests in a new set of stamps being issued Thursday. The 10-stamp set shows a forest scene with 27 plants and animals featured. The common and scientific names are printed on the back of the stamps. The Northeast Deciduous Forst sheet is the latest in a series detailing various environments across the country.

Talk about easy money -- just keep banging out new coins and new stamps and all those numismatists and philatelists will completely finance the government by feeding their addiction for new collectibles. So, through the magic of seigniorage, the (plain vanilla) money just keeps pouring in! Voila -- no Social Security crisis, no budget deficits!

Looking at some numbers: The United States Mint generated $1.65 billion in revenue in FY 2004 and contributed $665 million in earnings to the Treasury. So, since the total federal budget for FY2004 was $2.23 trillion, we only need to expand the U.S. Mint's seigniorage program by a factor of 3,352 to eliminate all federal taxes -- either come up with 3,352 times as many new coins like the buffalo bison nickel, or get 3,352 times as many people to start collecting coins.

Well, that was a nice little libertarian fantasy -- lasted almost 10 minutes.

In just one year, $2.23 trillion dollars spent by the federal government -- an awful lot of (buffalo) (bison) nickels and dimes (state) quarters.

(As for stamp collecting, unlike the braggarts at the U.S. Mint, the U.S. Postal Service is suspiciously secretive about how much revenue it derives from philately. I was unable to find any hard data on the topic.)

POST SCRIPT: Oh wait, the government could also start selling baseball cards to raise money! Oops, sorry -- that money flows the other way.

(Hat tip to Arkanssouri.)

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