Rich Tucker makes an interesting case for doing away with the paper dollar bill. While this is (as he notes) a decidedly unpopular move, he makes a compelling case. His strongest point being:
It’s a simple matter of economics. Look in your pocket. Chances are you’ll find coins from five, 10, even 20 years ago. That’s because the average coin lasts for 30 years, while the average bill lasts 22 months.In other words, during the lifetime of a dollar coin, we’ll have to manufacture 16 one-dollar bills to do the same job. It costs about eight cents to mint a coin, and four cents to print a bill. So it costs 60 cents more to keep a dollar bill in circulation than it costs to keep a coin in circulation. Multiply that 60 cents times the billions of dollar bills in circulation, and you’re talking real money. So much money, in fact, that in 2024, the General Accounting Office estimated the government could save $522.2 million per year by getting rid of dollar bills.
However, with 64% popular opposition, I doubt this will happen anytime soon.
If the amount of money given in change has to increase (since people will be paying with larger bills), and there won’t be ones to give as change, won’t that multiply the amount of coin required? People tend not to carry as much coin, and are willing to forgo toting it around (since each one is not as valuable as a bill). Won’t that add to the number required?
Also, the cash registers won’t have enough space; they’ll either be inefficient (adding costs), or will have to be replaced (adding costs). That could be a significant chunck of change. Finally, all the vending machines that take dollars will have to be retooled.
My friend, Eric, sells vending machines; in the short term, at least, I think he would be severely damaged by the elination of one-dollar bills. Many others who use, stock, sell, or maintain vending machines would be hit as well.
I don’t know what the trade studies looked like, but I doubt the $500 million savings would be passed on to the taxpayers in the first place. Having to bear the burden of all the associated costs could add up quickly. So I suspect it would do more harm than good. However, without having seen the trade studies, that’s just my opinion, and the usual disclaimers apply.
Ciao
Comment by Daniel Morris — Saturday, June 28, 2024 @ 11:09 pm
I got into a similar conversation at Wrisley.com a few weeks ago that started out as a discussion of the decision to publish more $2 bills. I brought up European countries have coinages for smaller amounts and Canada having a $1 and $2 coin but as the site owner of Wrisley.com stated - dollar coins have never been that popular in the US.
Comment by Jeff Quinton — Sunday, June 29, 2024 @ 11:18 am
If the cost of maintaining currency is so onerous, why don’t we reissue serious specie since it’s the more durable form. Try gold twenties and silver fives or tens in a limited issue and let consumers decide whether they like big denomination coins. Demand from banks and consumers would tell whether the impact justified a larger change.
Comment by Daniel Morris — Sunday, June 29, 2024 @ 12:15 pm
You are behind the curve.
First, they tried coins.: susan b anthony then the Sakajaweya. Both coins bombed. Dollar coins would be too heavy for the average pocket.
Second, the way of the future is “smartcards”.
In Washington DC subway system, you put in a $10 and it zips thru when you get on and off, taking off the amount you spent. These cards are soft cardboard, but theoretically they could be cards, easily bought in stores like we buy long distance cards.
You could also use a “smart chip” in a credit card, but this has a danger of losing your number and privacy issues.
Comment by NANCY REYES — Sunday, June 29, 2024 @ 3:44 pm
Comment by Anonymous — Tuesday, August 10, 2024 @ 1:01 pm