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Ever see a dollar coin?
The current Presidential $1 coins have been minted since 2007. The dollar coin has recently been thrown back into the spotlight by NPR after it’s reporting of the waste created by unused coins. But, contrary to NPR’s opinion, by eliminating the $1 paper dollar and switching our currency to use to the $1 coin, the US gov’t would save $184 million annually and $5.5 over 30 years. How does this work?
The $1 bill costs approx 5.5¢ to print with the average note lasting only 1.5 to 3.5 years before it’s shredded and thrown in a landfill.
The $1 coin costs approx 8¢ to mint, but could last to 30 years in circulation and is recyclable at the end of its life.
The total elimination of the paper $1 bill would save the Federal government billions in the long run. Of course in the first couple of years it would not make much of an impact, but that’s not exactly the $14 trillion dollar question we are worried about. Besides does it not make more sense to create savings in simple currency rather than $200 million out of social security, national defense or having to raise taxes? Why not switch?
The GAO’s report can be found here: http://www.gao.gov/new.items/d11281.pdf
I’ve also had some counterarguments thrown out for me. Here are some of the more common ones:
Vending machines don’t accept $1 coins. Actually, most machines accept them as do the self-service machines in supermarkets. The vending machine companies would much rather have $1 coins in circulation than paper dollars, e.g. it’s expensive to install those bill scanners and then having to fix them after a ratty $1 bill got jammed in it by some frustrated customer.
Dollar coins are heavy. Yes, they are compared to the dollar bill. Compared to 4 quarters: not so much. Does that make them more cumbersome? Not necessarily. The Canadians, Australians, Europeans and British all have one and two coin denominations and society hasn’t come to a screeching halt for them.
The changeover will be expensive. Sure, there’s going to be initial start-up costs for the sudden and massive demand for $1 coins. However, the mint has two weapons in it’s arsenal against this. First is that $1 coins are already produced and there’s a $1 billion coin stockpile in Federal Reserve vaults as NPR reported. Second is the $2 bill, which are still printed in quite large quantities. Seriously, if you hate coins that much, as for the Twos at your bank. They have them.
You can’t get dollar coins! Banks have them. Next time you’re in your bank, ask for them. Not to mention there’s approx. $1 billion in dollar coins sitting in Federal Reserve banks.
What about counterfeiting? The coins are worth a dollar a piece. Creating a profitable counterfeiting operation that could match the bulk purchases and economies of scale that the US Mint has would be difficult. You can also look at the €/£/AU$/C$ currencies all of which have 2 unit coin denominations and do not suffer from numerous counterfeiting problems.
… and the obligatory ‘What to do?’
> Contact your lawmakers.
> Go to your bank, withdraw dollar coins and start spending them. (I do.)