The fact is that a dollar is not really worth enough to be a bill anymore. When I was a child (and I'll admit that was a long time ago) you could buy more with a quarter than you can today with a dollar. Americans may not want to admit it but a dollar is just pocket change these days.
And they don't want to admit it. A Gallup Poll in 2006 showed that 79% of the American population did not want to go to a dollar coin. Although that dropped to 64% when it was explained how much money the government could save by going to dollar coins and discontinuing dollar bills. I'm not aware of a more recent poll, but a dollar is worth even less now than it was in 2006 (so hopefully attitudes have softened a bit toward the idea of a dollar coin).
How much could the government save? Consider this -- a dollar bill have a life expectancy of about 40 months (slightly over 3 years), but a coin will last for many decades. The Government Accountability Office says the government could save about $5.5 billion over a period of 30 years. Now that's not going to balance the budget by itself -- far from it. It's just a little over $183 million each year. But why should we spend $183 million each year when we don't have to (and when it really doesn't accomplish anything). After all, a few million here and a few million there adds up to real money before long.
I think it's definitely time to go to a dollar coin, but the government needs to do it right this time. When they introduce the coin they need to stop making the dollar bills. Don't give people the choice. In a few years people will accept it -- and most will wonder why they ever thought the dollar should be made out of paper in the first place.
Today's dollar is just pocket change (and it's value won't rise in the future). We need to admit this and make it the coin that it should be. And the nice part is the government will be saving money -- millions of those dollar coins each year (and that makes a lot of sense in this recession).
Another suggestion: Don't make it so close in size to the quarter (like the Susan B. Anthony dollar coin was).
ReplyDeleteI agree. When you put your hand in your pocket it should not feel like a quarter.
ReplyDeleteThe USA needs to cut spending, no one wants to tap the rich for any money. So coins are cheaper to make and the $1 is worthless then a 25cnet piece.
ReplyDeleteWell as suggested stop making $1 paper, remark 50cents as $1, throw out the 50c and the 1c.
And those that don't like it can just ???Well adapt!
I'm not sure I understand why going to a dollar coin would be all that great. Fiat currency is fiat currency no matter how it's printed or stamped.
ReplyDeleteNot only that but it seems to me that we lose money on all the coinage too.
What would this dollar coin be made of?
Don't get me wrong I'm not knocking the idea of saving some money. But it just seems a bit fishy to me. I guess I need some more info.
Hal (GT),
ReplyDeleteAccording to the Bureau of Engraving and Printing (see this link), the life span of a $1 note is 42 months. This means each dollar bill has to be replaced every 3 and a half years (i.e. old one destroyed, new one printed).
Although the initial cost of a $1 coin is greater than that of a $1 note, coins can last for decades before they have to be replaced.
Doesn't that make more sense?
Re: Curious Texan,
ReplyDeleteYep that makes sense and I can see it from that perspective. I just am not sure Americans will be will to part with their paper $1 Though it might certainly help to curtail the drug trade.
The thought that occurred to me a bit later yesterday was why not just get rid of all paper and coin currency and switch to an electronic means of transfer through smart phones or similar devices like we've seen in old Sci/Fi movies.
Mobile Gas already uses a device that does this call the Speed Pass. And I've heard to apps on phones that allow you to tap and pay a bill in a restaurant. Seems like a far greater way to reduce costs of printing money.