US money fac­tory gives a cheap thrill

Weekend Argus (Saturday Edition) - - ISSUES - COURT­LAND MIL­LOY

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

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