Bring Back Paper Savings Bonds

[smurff]

There's been lots of dissatisfaction about the cancellation of paper savings bonds, so the folks at Savingsbonds.com started a petition to bring them back:

http://www.bringbackpapersavingsbonds.com/

When they get 100K signatures, they plan to submit them to the President of the USA.

I signed it. 

I-bonds (and sometimes EE-bonds) are great for the cash allocation of the PP, but until they bring back paper bonds for direct purchase (rather than the circuitous route through the IRS), I won't be putting any cash in them again.

[moda0306]

Why are we stopping at paper bonds?

If we're going to do this let's do this right and get bearer-bonds back in style.

[dualstow]

I do like looking at the I- and EE-bonds locked in my relative's safe, especially since I am currently locked out of my own TreasuryDirect account.

[smurff]

I've been locked out of my Treasury Direct account for several years.  It happened a few days after I first opened it.  Fortunately I had not put any funds in it or made any investments.  Somewhere out there in Web 1.0 Land, there's a TD account with my name on it and a lock on the door--which a hacker somewhere may have picked by now.

Whenever some online-personal-finance-thing I'm using gets screwed up through no fault of my own, I don't go back to it.  Even then, such screw ups have happened rarely to me, only a couple of times in the past fifteen years, with the TD incident one of them.  The risks are just too high, especially since there is no paper trail from the Treasury Dept, which may or may not replace investments that fall victim to e-theft or e-evaporation. 

[SteveGo]

I had been locked out of a TD account since they changed from the bingo card, because I kept messing up the logon process.

This year, I opened a couple of new accounts to buy I-Bonds for my wife and me. Out of curiosity, I followed the procedures and contacted them for unlocking the old account. First I sent an email from their contact form. After two days I got a reply by email, saying someone would contact me by phone. About a week and a half later I found a message on my phone, with a name and extension to contact. I called the extension, got the person, and she asked me a few questions, and unlocked the account.

This procedure was certainly more trouble than I expected, but it did work.

[dualstow]

I had been locked out of a TD account since they changed from the bingo card, because I kept messing up the logon process.

This year, I opened a couple of new accounts to buy I-Bonds for my wife and me. Out of curiosity, I followed the procedures and contacted them for unlocking the old account. First I sent an email from their contact form. After two days I got a reply by email, saying someone would contact me by phone. About a week and a half later I found a message on my phone, with a name and extension to contact. I called the extension, got the person, and she asked me a few questions, and unlocked the account.

This procedure was certainly more trouble than I expected, but it did work.

( I guess we need to change this thread title  ) I went one step further and failed the authentication test on the phone, because I gave fake answers to my questions about real-life things. Nowadays, I write them down. But, I have to fill out a form and have it notarized by a bank to unlock my account. It's been years, and I'm in no hurry to unlock it, unless one day I get the urge to buy more I-bonds.

[smurff]

My plan is to fill out the extension form, send in a check with the form to overpay my taxes this month, and then use Form 8888 to order the Ibonds when I File my taxes next month.

But I don't believe the IRS will allow people to get away with this beyond this tax season, unless there are enough petitioners who want paper savings bonds back.

[shoestring]

I find it ironic an online petition, which never works anyway incidentally, is being used as a means to reinstate a paper instrument.  Seriously do most of the buyers of paper bonds spend an appreciable amount of time researching areas of financial concern on the internet?

That said I thought it was just the I bonds that had gotten this treatment.  I am left scratching my head at this decision.  Sure you save 14 million but surely they realize they will lose more than that in revenue.

The class warfare rhetoric on that page does not help either.  I am confident the Treasury treats everyone's money the same for good or ill.

[Ad Orientem]

Why are we stopping at paper bonds?

If we're going to do this let's do this right and get bearer-bonds back in style.

I would love to see bearer bonds legalized again.  But the Feds hate them for the same reasons that I like them.  They are highly liquid, no paper trail, and they allow for anonymity.  Yeah, there are risks.  If they are lost stolen or destroyed, it's like losing cash.  You are pretty much SOL.  But I would take the risk.  Sadly you have to go out of the US now to buy bearer bonds.

[moda0306]

Why are we stopping at paper bonds?

If we're going to do this let's do this right and get bearer-bonds back in style.

I would love to see bearer bonds legalized again.  But the Feds hate them for the same reasons that I like them.  They are highly liquid, no paper trail, and they allow for anonymity.  Yeah, there are risks.  If they are lost stolen or destroyed, it's like losing cash.  You are pretty much SOL.  But I would take the risk.  Sadly you have to go out of the US now to buy bearer bonds.

In a world of .05% interest rates, I suppose greenbacks are the closest things to bearer bonds we can hope for.

[smurff]

I find it ironic an online petition, which never works anyway incidentally, is being used as a means to reinstate a paper instrument.  Seriously do most of the buyers of paper bonds spend an appreciable amount of time researching areas of financial concern on the internet?

No, many of them don't have Internet access.  Some of them fear using the Internet/web for shopping or any financial transaction, and as fearful individuals these may not always be the same people one would expect based on income, education, and other indicators. 

But many people who bought paper savings bonds do have Internet access and do most things involving money online.  Some, however, have seen enough weird things happening with financial matters in the USA, and recognize the deficiencies in the design of the Treasury's online program, to believe there is danger without official paper as back-up--which, BTW, paper bonds always were.   

Online petitions may not be sexy, but they have worked for a variety of issues.  Two recent ones include the Planned Parenthood/Komen Foundation funding dispute, and threatened boycotts against advertisers on Rush Limbaugh's show.  (I mention these as examples, not to start a discussion about these two events.  Any such discussion would have to take place in the "Other" section of this board.)

That said I thought it was just the I bonds that had gotten this treatment.  I am left scratching my head at this decision.  Sure you save 14 million but surely they realize they will lose more than that in revenue.

First the payroll deduction program was cancelled.  Then paper I-bonds were lost to electronic I-bonds, then the paper EEs lost to electronic. Next the online limit was to stay the same, then it was increased.  Paper I-bonds available only through the IRS with maybe the EEs, then only the I-bonds.  Whether deliberately designed to be so or not, the Treasury's statements and actions have definitely been confusing. 

There is also the issue of scale and orders of magnitude.  Saving $6 million out of a $10+ trillion treasury is so insignificant that it is mere rounding error.  Some of the costs the Treasury complained about could have been covered by allowing a small handling fee, (not sure whether doing that may have needed Congressional approval), or looking abroad for ideas on how other nations handle these types of savings products.

The class warfare rhetoric on that page does not help either.  I am confident the Treasury treats everyone's money the same for good or ill.

Everyone's money may be treated the same, but the definitions of "same" often varies.  Relatively minor changes that government agencies and other large organizations make will sometimes negatively impact one group more than others.  It is not necessary that the Treasury, or any other private or government organization, intend to have this negative effect for the effect to exist--which is often the case with such matters that impact people differently depending on race, class, gender, age, religion, or (dis)ability status. 

If a change is believed to affect people differently based on social class, one way to address it is to say it out loud (class being something Americans are reluctant to acknowledge or discuss openly).  Even though saying it out loud (or writing it on a petition) may make some people uncomfortable, saying it may also make other people feel as if their issues have had a hearing and have a hope of being addressed.  I believe both groups of people are entitled to respect for their feelings, whether or not I agree with them.

Anyway, over the past thirty years or so there have been open meetings laws at the local level, the Freedom of Information Act, and requirements for various local, state, and federal government agencies to publicly post or publish proposed changes and allow comments from the public for a definite period of time--60 to 90 days comes to mind--before actually making any change or instituting any new procedure. Whether the Treasury did that before canceling paper I-bond sales at banks and online, I don't know for certain, but something tells me they did not.  (Whether or not they were required to do so is another matter.)  It seemed that one day, there was an edict, with no opportunity for official commentary from the public, and the change took effect, other views and alternatives be damned.

[blancalily]

My plan is to fill out the extension form, send in a check with the form to overpay my taxes this month, and then use Form 8888 to order the Ibonds when I File my taxes next month.

Smurff,

Help me understand the process you are describing here.  What is the benefit of submitting the extension form vs. just making an estimated tax payment?  If you were to make an estimated tax payment by the end of March, would that count towards amounts paid for 2011?

I'd like to get some paper I bonds too and I'm trying to understand what I need to do and when.

Thank you,
BL 

[smurff]

I think it's just easier if you don't have to calculate too much. When you file for an extension you pay (or in my case, overpay) the taxes due.   It's just an easier way to overpay.

[smurff]

I forgot, you also get the other advantages, including filing late. But you don't have to file late.

[BearBones]

Recently got iBonds back as tax refund. Now what? I was thinking of converting to electronic at TD to keep things consolidated and simpler. What are the advantages of keeping paper?

[MediumTex]

Recently got iBonds back as tax refund. Now what? I was thinking of converting to electronic at TD to keep things consolidated and simpler. What are the advantages of keeping paper?

If there was ever something that was going to be a collector's item, it will be these paper bonds that can only be obtained through tax refunds.

I would hang onto them for that potential appreciation alone.

[smurff]

Recently got iBonds back as tax refund. Now what? I was thinking of converting to electronic at TD to keep things consolidated and simpler. What are the advantages of keeping paper?

You can put paper bonds in your safe deposit box, next to your gold coins, and walk away without worrying that an electromagnetic pulse (or some relatively minor catastrophe, like malicious anti-American hackers) will wipe out all the evidence of your wealth.  Paper archives simplify the process of reconstructing financial records.

[MediumTex]

Recently got iBonds back as tax refund. Now what? I was thinking of converting to electronic at TD to keep things consolidated and simpler. What are the advantages of keeping paper?

You can put paper bonds in your safe deposit box, next to your gold coins, and walk away without worrying that an electromagnetic pulse (or some relatively minor catastrophe, like malicious anti-American hackers) will wipe out all the evidence of your wealth.  Paper archives simplify the process of reconstructing financial records.

Think of a safe deposit box as a place where your assets can sleep soundly without too many disruptions.

[WildAboutHarry]

I have two major regrets in life: 

1) Not learning how to play the piano;
2) Converting my paper I-Bonds into electronic form.

[AdamA]

I have two major regrets in life: 

1) Not learning how to play the piano;
2) Converting my paper I-Bonds into electronic form.

Can't help you with #2, but this is a great book for #1.  http://www.amazon.com/Play-Piano-Despit ... 0385142633

It's called "How to Play Piano Despite Years of Lessons: What Music Is and How to Make It at Home."  It's surprisingly simple.  It won't make you sound like Oscar Peterson, but you'll be able to play pretty arrangements of your favorite songs with relative ease.

This one, "How to Play Popular Piano in 10 Easy Lessons," is also very good. 
http://www.amazon.com/gp/product/067153 ... 05T12RQ73P

Harry Browne seems to have had the same frustration.  He would mention it from time to time when discussing the roles of skill and talent in investing.  I think he knew how to play, but just wasn't' as good as he would have liked.  He eventually came to terms with the fact that he lacked talent, and would therefore have to work very hard to get better. 

[hoost]

Recently got iBonds back as tax refund. Now what? I was thinking of converting to electronic at TD to keep things consolidated and simpler. What are the advantages of keeping paper?

You can put paper bonds in your safe deposit box, next to your gold coins, and walk away without worrying that an electromagnetic pulse (or some relatively minor catastrophe, like malicious anti-American hackers) will wipe out all the evidence of your wealth.  Paper archives simplify the process of reconstructing financial records.

Think of a safe deposit box as a place where your assets can sleep soundly without too many disruptions.

What do you know about safe deposit boxes in economic "doomsday" scenarios?  I'm thinking of the experiences that were had in Argentina and Iceland.  Were people ever denied access to their boxes or anything like that?

[MediumTex]

You can put paper bonds in your safe deposit box, next to your gold coins, and walk away without worrying that an electromagnetic pulse (or some relatively minor catastrophe, like malicious anti-American hackers) will wipe out all the evidence of your wealth.  Paper archives simplify the process of reconstructing financial records.

Think of a safe deposit box as a place where your assets can sleep soundly without too many disruptions.

What do you know about safe deposit boxes in economic "doomsday" scenarios?  I'm thinking of the experiences that were had in Argentina and Iceland.  Were people ever denied access to their boxes or anything like that?

I have some great news for you: Most American's own almost nothing of value that would be worth putting in a safe deposit box in the first place.  What this means is that the potential bang for the buck from messing around with safe deposit box confiscations on a large scale would appear to make the effort unappealing to the U.S. government. 

What might a person have in a safe deposit box that the U.S. government would be interested in?  Obviously, if a person has committed a crime the contents could be of interest, as it might include stolen property or evidence.  Assume, however, that we aren't dealing with a criminal, we are just dealing with a person who has worked hard and saved a little money and chosen to purchase something of value and store it in a safe deposit box.  If it's gold, the U.S. government already has plenty of that.  I don't know why it would be interested in confiscating more from private citizens when all it really needs to do to achieve the same result is add an extra 25% tax on all gold transactions and it would kill the gold market almost overnight and then the U.S. government could simply buy all the gold it wanted at depressed prices, which would be vastly more efficient than rummaging through thousands of safe deposit boxes hoping to find a few coins here and there.

When thinking about economic doomsday scenarios in general, how likely is it that an Argentina or Iceland-type event would ever hit the U.S.?  The U.S. won't always enjoy its current position, but right now it's #1 in the world.  When you're #1, you don't have to worry about a lot of things that countries like Argentina and Iceland have to worry about.  Think about it: #1 currency, #1 economy, #1 military, #1 bond market, #1 manufacturing capacity, #1 overall natural resource deposits and production infrastructure...this country has a lot of problems but when you are that far ahead of much of the rest of the world it helps dampen the fallout from many bad events.  Take 2008, for example--the rest of the world gripes about the U.S., but when fear started really gripping investors they piled into the U.S. dollar and treasuries.  I think that people like Peter Schiff don't fully appreciate this dimension of the U.S.'s position in the world.

I also think that there are a lot of Republicans in the House who were sent there precisely because their constituents were concerned about things like safe deposit box confiscations and other similar actions, and thus I think these people would be firmly against any such efforts, which would probably be enough to derail it.  Unlike the scant media attention that is being given to informal capital controls that are making it harder and harder for U.S. citizens to take their wealth our of the country, I am pretty sure that the media would love covering federal agents drilling open safe deposit boxes in small towns across the country as Ma and Pa Kettle stood outside the bank hoping that their 1926 marriage license wasn't confiscated along with their stamp collection and silver dollars that they had hoped to give to their grandchildren one day. 

Think about how much the media would love showing film of federal agents knocking an old lady down in front of a small town credit union after she inadvertently got in their way as they carried the confiscated contents of safe deposit boxes out to their thug-mobile.  Imagine the old lady on the ground with a footprint from a government boot on her back as reporters stuck microphones in her face.  She might say something like: "We never had much, but we thought that what little we did have would be safe here.  Can one of you help me get up please?"

[WildAboutHarry]

It's called "How to Play Piano Despite Years of Lessons: What Music Is and How to Make It at Home."  It's surprisingly simple.  It won't make you sound like Oscar Peterson, but you'll be able to play pretty arrangements of your favorite songs with relative ease.

Thanks.  I never took a piano lesson (I learned trumpet in school), but the books look very interesting.  Maybe there is hope.

I am pretty sure that the media would love covering federal agents drilling open safe deposit boxes in small towns across the country as Ma and Pa Kettle stood outside the bank hoping that their 1926 marriage license wasn't confiscated along with their stamp collection and silver dollars that they had hoped to give to their grandchildren one day.

They may not be after safe deposit boxes, but the California Department of Fish and Game is seizing stuffed animals these days: http://www.fox40.com/news/headlines/ktx ... 0714.story.

Wardens visited the bar to investigate, and they removed a wolverine and red-tailed hawk.  The two creatures are on a list of rare animals that are illegal for individuals to possess in California, living or dead.  The Department of Fish and Game will forward the complaint to the El Dorado County District Attorney's office for further investigation.  The Georgetown Hotel opened in 1896.  Bar patrons and business owner Virginia Asbury tell FOX40 the stuffed animals have been there for as long as anyone can remember.

I see a potential way to save a small fraction of CA's $16 billion budget deficit...

[MachineGhost]

#1 manufacturing capacity

Really?  Not China?  Or Japan?  It sure seems like everything is made in China these days which is why quality has declined so much over the past 18 years.  Hedonic adjustments my ass.

#1 overall natural resource deposits and production infrastructure...

Really?  Not Canada?  When are we going to annex it as the 51st state?

[MediumTex]

#1 manufacturing capacity

Really?  Not China?  Or Japan?  It sure seems like everything is made in China these days which is why quality has declined so much over the past 18 years.  Hedonic adjustments my ass.

A lot of consumer junk is manufactured in those places, but when you add up the cars, missiles, airplanes and heavy equipment, the U.S. is #1, though China is not far behind.

#1 overall natural resource deposits and production infrastructure...

Really?  Not Canada?  When are we going to annex it as the 51st state?

When you look at oil, gas, coal, gold, timber, and the whole natural resource space, and you look at the U.S. offshore Gulf of Mexico activities, the U.S. is very productive and always has been.