Oh well, to look on the bright side, re the cover-up
of interest relief gains, that final footnote will provides a neat bow to with
which to tie up my analysis, in part IV.
[1] For
clarity, I prefer the word "taxpayer" to "government." I explain why in due
course. Here, it suffices to note that
it is unimaginable that Congress did not intend for the answer to keep it in
ignorance it as to the net taxpayer benefit, and that this was unambiguously understood
as the question asked in the below four reports that the 2011 report updated
and refers the reader to for model details.
[2] GAO , National Coinage Proposals: Limited
Public Demand for New Dollar Coin or Elimination of Pennies, GAO/GGD-90-88 (washington, D.C.: May 23,1990); 1-Dollar Coin: Reintroduction Could Save Millions If
Properly Managed, GAO/GGD-93-56 Dollar Coin Could Save Millions, GAO/T-GGD-95-203 (Washington, D.C.: July 13, 1995); and Financial Impact of Issuing the New $1 Coin, GAO/GGD-00-111R (Washington, D.C.: Apr. 7, 2000).
[3]
The formal definition omits the small deduction for the Mint's operating
expenses, but the net benefit calculation of course deducts it.
[4]
In (Pentagon) testimony I once pored over, a good rule of thumb turned out to be that, if a
witness simply denied something, then it likely as not was false; whereas, if a witness absolutely denied something, then it was sure to be true.
[5] Meeting
of the Federal Open Market Committee, January 30-31, 2001. Until the 1930s, the Fed did not buy
government bonds. By 2001, the FOMC rated
them so far above everything else, that it feared having to think what to buy. Here's the premise:
"Under
a wide variety of assumptions about the growth of the economy and the political
process, Treasury debt will be repaid over coming years. Even if the entire
on-budget surplus is used in tax cuts and new spending, debt will be close to
extinguished in 10 years under a fairly conservative assumption of 3-1/2
percent trend economic growth."
Every member regretted
the coming debt-free days. Since the Fed returns its profits to the government,
Mr. Broaddus' recommendation was that the Fed start buying securities with
super low returns. They would pay so
much less than treasuries, that the government would again sell treasuries to
the Fed simply to get higher Fed profits returned! (Even though these returned profits would be
no more than its own interest payments.)
Mr. Poole suggested the Fed might beg to borrow the vast assets into
which Social Security debt would be converted.
Vice-Chairman McDonough recoiled at "the invidious notion of Social
Security or any other part of the U.S. Government holding assets." Pages 13, 17-18, 25. Looking forward to a distant time when Social
Security would begin to have more outlays than revenues, Mr. Poole wistfully
ruminated: "Once the Social Security system is selling off assets, our problem
will become a bit easier."
Mr. Goodfriend:
"our goal[] to minimize private assets acquired by the government, we could
make that understood"in which case they would do with the money what Governor
Meyer is saying --
Mr. Greenspan:
Meaning, lower their surpluses and refund taxes.
Mr. Goodfriend:
Think of it as a "money rain" every day!
[6] " To
expedite this letter, in calculating the government benefits from converting
from $1 notes to $1 coins, we simplified the Federal Reserve model and did not
calculate average annual present value savings over 30 years. Instead, we
calculated the average annual benefits by using current dollar estimates for 1
year, using the same cost factors and elements used in the model and assuming
the coin was fully implemented." (Pages 1-2.)
With respect to the coin replacement, the report states the $15 billion
"face-value" of coins as the basis for interest relief, but only en passante, without comment (page 6,
note h).
[7]
These figures are taken/deduced quite simply from the table on page 32 (base
case column). If in error, they can't be
so far off as to meaningfully alter the order-of-magnitude conclusions drawn.
[8]
See Part I footnote 8, re these accounting classifications. The Fed pays private dividends, and its
account is as extrinsic as China's.
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