Category Archives: Money

‘Santa’ showers $100 bills on storm-hit N.J., N.Y.

via USA Today: 

 

NEW YORK (AP) — A wealthy Missouri man posing as “Secret Santa” stunned New Yorkers, handing $100 bills

to many in Staten Island who had lost everything to Superstorm Sandy.

The Kansas City businessman is giving away $100,000 this holiday season, and spent the day in New Jersey and New York giving away thousands. But he says money is not the issue.

“The money is not the point at all,” said the anonymous benefactor on Thursday as he walked up to surprised Staten Island residents and thrust crisp bills into their hands. “It’s about the random acts of kindness. I’m just setting an example, and if 10 percent of the people who see me emulate what I’m doing, anybody can be a Secret Santa!”

A police motorcade with sirens took him across the borough, passing a church ripped from its foundations and homes surrounded by debris. At a nearby disaster center run by volunteers, a woman quietly collected free food and basic goods.

“Has anyone given you any money?” he asked her.

“No,” replied Carol Hefty, a 72-year-old retiree living in a damaged home.

“Here,” he said, slipping the money into her hand.

“But this isn’t real money!” said Hefty, glancing at the red “Secret Santa” stamped onto the $100.

“It is, and it’s for you,” he told her.

She broke down weeping and hugged him.

And so it went, again and again.

Secret Santa started his daylong East Coast visit with stops in Elizabeth, N.J. Keeping close watch over the cash handouts was his security entourage — police officers in uniform from New York and New Jersey, plus FBI agents and former agents from various states. Some have become supporters, wearing red caps marked with the word “elf” and assisting “Santa” to choose locations where people are most in need. He himself wears an “elf” cap and a red top, plus blue jeans.

The group must choose stops carefully, and refrain from simply appearing outdoors in a neighborhood, lest they be mobbed by people hearing that cash is being handed out.

At a stop at a Staten Island Salvation Army store, one woman was looking over a $4 handbag. “But you get $100!” he told her, offering the bill.

“Are you serious?” said Prudence Onesto, her eyes widening. “Really?”

“Secret Santa,” he deadpanned, breaking into a broad grin.

The 55-year-old unemployed woman opened her arms and offered him a hug.

An aisle over, 41-year-old Janice Kennedy was overwhelmed: She received four $100 bills.

Unemployed with a 2-year-old daughter, she lost her home in the storm and lives with her boyfriend. The money will go toward Christmas presents and her toddler’s next birthday.

“You’re not alone. God bless you!” the Missouri stranger told Phillip and Lisa Morris, a couple in their 30s whose home was badly damaged — but now had an extra $300 in cash for rebuilding.

Secret Santa took up the holiday tradition from a close Kansas City friend, Larry Stewart, who for years handed out bills each December to unsuspecting strangers in thrift stores, food pantries and shelters. Stewart died in 2007 after giving away more than $1 million to strangers in mostly $100 bills.

The current Secret Santa will not divulge his name. Nor does he allow his face to be photographed. But he said he’s been to cities across America, from San Diego to Chicago to Charlotte, N.C.

A reporter asked whether he might be a sort of Warren Buffett of Kansas City. He smiled mysteriously and said only that he admires Buffett for his philanthropy. “And I hope I give all my money away before I die.”

Then, as suddenly as he arrived, the generous stranger left for the airport and home, riding in the volunteer motorcade he jokingly calls “my sleigh,” zipping with ease through red lights and city traffic.

Congress Looks at Eliminating the $1 Bill

via AP:

 

WASHINGTON (AP) — American consumers have shown about as much appetite for the $1 coin as kids do their spinach. They may not know what’s best for them, either. Congressional auditors say doing away with dollar bills entirely and replacing them with dollar coins could save taxpayers some $4.4 billion over the next 30 years.

Vending machine operators have long championed the use of $1 coins because they don’t jam the machines, cutting down on repair costs and lost sales. But most people don’t seem to like carrying them. In the past five years, the U.S. Mint has produced 2.4 billion Presidential $1 coins. Most are stored by the Federal Reserve, and production was suspended about a year ago.

The latest projection from the Government Accountability Office on the potential savings from switching to dollar coins entirely comes as lawmakers begin exploring new ways for the government to save money by changing the money itself.

The Mint is preparing a report for Congress showing how changes in the metal content of coins could save money.

The last time the government made major metallurgical changes in U.S. coins was nearly 50 years ago when Congress directed the Mint to remove silver from dimes and quarters and to reduce its content in half dollar coins. Now, Congress is looking at new changes in response to rising prices for copper and nickel.

At a House subcommittee hearing Thursday, the focus was on two approaches:

  • Moving to less expensive combinations of metals like steel, aluminum and zinc.
  • Gradually taking dollar bills out the economy and replacing them with coins.

The GAO’s Lorelei St. James told the House Financial Services panel it would take several years for the benefits of switching from paper bills to dollar coins to catch up with the cost of making the change. Equipment would have to be bought or overhauled and more coins would have to be produced upfront to replace bills as they are taken out of circulation.

But over the years, the savings would begin to accrue, she said, largely because a $1 coin could stay in circulation for 30 years while paper bills have to be replaced every four or five years on average.

“We continue to believe that replacing the note with a coin is likely to provide a financial benefit to the government,” said St. James, who added that such a change would work only if the note was completely eliminated and the public educated about the benefits of the switch.

Even the $1 coin’s most ardent supporters recognize that they haven’t been popular. Philip Diehl, former director of the Mint, said there was a huge demand for the Sacagawea dollar coin when production began in 2001, but as time wore on, people stayed with what they knew best.

“We’ve never bitten the bullet to remove the $1 bill as every other Western economy has done,” Diehl said. “If you did, it would have the same success the Canadians have had.”

Beverly Lepine, chief operating officer of the Royal Canadian Mint, said her country loves its “Loonie,” the nickname for the $1 coin that includes an image of a loon on the back. The switch went over so well that the country also went to a $2 coin called the “Toonie.”

Rep. Bill Huizenga, R-Mich., affirmed that Canadians have embraced their dollar coins. “I don’t know anyone who would go back to the $1 and $2 bills,” he said.

That sentiment was not shared by some of his fellow subcommittee members when it comes to the U.S. version.

Rep. Lacy Clay, D-Mo., said men don’t like carrying a bunch of coins around in their pocket or in their suits. And Rep. Carolyn Maloney, D-N.Y., said the $1 coins have proved too hard to distinguish from quarters.

“If the people don’t want it and they don’t want to use it,” she said, “why in the world are we even talking about changing it?”

“It’s really a matter of just getting used to it,” said Diehl, the former Mint director.

Several lawmakers were more intrigued with the idea of using different metal combinations in producing coins.

Rep. Steve Stivers, R-Ohio, said a penny costs more than 2 cents to make and a nickel costs more than 11 cents to make. Moving to multiplated steel for coins would save the government nearly $200 million a year, he said.

The Mint’s report, which is due in mid-December, will detail the results of nearly 18 months of work exploring a variety of new metal compositions and evaluating test coins for attributes as hardness, resistance to wear, availability of raw materials and costs.

Richard Peterson, the Mint’s acting director, declined to give lawmakers a summary of what will be in the report, but he said “several promising alternatives” were found.

Paul Krugman Outright Calls for Printing Money and Lots of It

via Lew Rockwell Blog:

Paul Krugman Outright Calls for Printing Money and Lots of It

In his NY Times column today, Paul Krugman lets himself go and calls for an outright “inflation solution.” The government, he says, does not have to worry about debt, since it can print as much money as it wants and investors apparently never will change any of their plans or expectations. Indeed, he writes that more inflation will encourage more investment, since “expected inflation would discourage corporations and families from sitting on cash, while a weaker dollar would make our exports more competitive.”

I deal more with his column in my Krugman-in-Wonderland blog. By the way, it is a two-for-one special as Warren Buffett in another NYT op-ed makes the amazing claim that tax rates have no effect upon investment decisions.