US money factory gives a cheap thrill
I RECENTLY visited the US Bureau of Engraving and Printing to watch money being made. Call it a cheap thrill while waiting for some real economic stimulation.
“We print between $700 million (R5 551.15m) and $750m a day,” said PJ, a tour guide. At that rate, it would take less than five minutes to stimulate my bank account, boost my consumer confidence and get me spending again. Ooh la la. Through windows along the tour route, I saw sheets of $100 bills coming out of a 16m long, 4m high monster of a printing press. It was the mother of all cash cows: nursing the Federal Reserve, feeding the big banks, sustaining a global network of ATMs that suckles 24-7.
A sign in the press room read: “We make money the old fashion way. We print it.”
A stack of notes worth $32m, shrink-wrapped and resembling loaves of bread, sat on a skid in a corner.
I was mesmerised, “like a one-eyed cat peeping at a seafood store,” to borrow a line from songwriter Jesse Stone’s 1950s hit, Shake, Rattle and Roll.
Did you know that banknote paper is 75 percent cotton and 25 percent linen? Fabric pressed into paper, dyed green and called a dollar — amassed in sufficient quantities — can end poverty, cure disease, pay mortgages, car notes, school tuition.
It takes about four cents to make a dollar.
The bureau, located on 11.25ha just off the mall in Washington, printed the extra currency needed as a result of President Barack Obama’s $787 billion stimulus package. So why is so much of it stuck in bank vaults instead of stimulating my wallet?
Alan Blinder, a former vice chair man of the Federal Reserve Board and professor of economics at Princeton, wrote in The Washington Post last week, “The simple truth is that even the voracious US gover nment cannot spend $787bn quickly.”
The bureau likes to publish “fun facts” about such things. For instance, if you had $10bn in $1 bills and spent one every second of every day, it would take 317 years for you to go broke.
Of course, the economic stimulus should have kicked in by then.
Still, you have to wonder why that money wasn’t put directly into the hands of taxpayers. The bureau has a guillotine that can cut up sheets of money into $10 000 bricks. Why not send one to every taxpaying American household, say 100 million households?
There’s a trillion dollars that might actually be spent on consumer goods. Jobs would be saved, homeowners spared foreclosure. But no. “Scared consumers are hanging onto their cash, bemoaning the lost value of their houses and trying to reduce their debts,” Alice Rivilin, senior fellow at the Brookings Institution, wrote in The Washington Post recently.
“They won’t rush back to the mall to buy things they don’t absolutely need. Employers will be cautious about hiring until they are sure the recovery is robust, so unemployment will remain high for several years.”
It need not be that way. There is just too much money floating around for so many people to be in such misery.
I suggest that more people visit the bureau, aka “America’s money factory,” to see what they are missing. – Washington Post