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Should the paper dollar bill be scrapped for longer-lasting coin?

The Sacagawea Golden Dollar coin.
The Sacagawea Golden Dollar coin.

A report released last week shows some big advantages to scrapping the paper $1 bill in the United States and fully adopting the $1 coin in its place.

The report states that “It is rare to have an opportunity to implement a policy that can save American taxpayers billions by reducing the nation’s deficit, save small businesses and public agencies money, and help the environ- ment. Switching from the dollar note to the dollar coin is one such rare policy opportunity. It is a sim- ple, common sense change, which could accomplish all of these important objectives, has bipartisan support in Congress, as well as the support of two-thirds of the American people. It has been proven successful numerous times in Canada, Europe, England, and all other major industrialized nations. With the current focus of the Administration and Congress on reducing the deficit and promoting economic growth, there is no better time than now to modernize our one dollar currency to the coin.”

The report claims that Canada has reaped “tremendous success” with both a one dollar and two-dollar coin.

The $1 coin costs more to produce (18 cents) than the paper dollar (5 cents) but last much longer (30 years for the coins versus less than 5 for the paper note).

The report concludes that “The dollar coin saves the government money. The natural question is, how much does it save? The Government Accountability Office (GAO) is Congress’ budget watchdog, which frequently investi- gates the inner workings of government with an eye to boosting efficiency. It should come as no surprise then that the GAO has published on this topic extensively, recommending to Congress in eight separate reports over the last twenty-three years that the U.S. government should switch from a dollar note to a dollar coin. In its most recent estimates, in 2012 and 2013, GAO calculated that the switch would save $4.5 billion over 30 years.  In 2011, GAO estimated that it would save the US Government $5.5 billion to switch from dollar notes to dollar coins, over a 30-year time horizon.”

The two major reasons driving the change in this estimate were:

1) An increase in the estimated life span of the dollar note from 40 months to 56 months (which was previously addressed); and
2) The U.S Department of Treasury’s December 2011 decision to suspend production of ad- ditional circulating dollar coins.

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Observer
10 years ago

Figure $200 per vending machine costs for new coin acceptors. Given most vending machines already have dollar acceptors it would make them redundant unless they were able to upgrade to accepting $5 bills.

Then of course counting and rolling machine to go with it, usually $600 apiece. Since there are no mechanisms I am aware of that vend the $1 coins as change, we open up a whole new can of worms. The footprint for existing coin mechs is finite.

As I was told, in the usual coin mech, three people using a $5 bill in a vending machine for a $1.25 bottle of pop would run the machine out of change.

Bottom line, better get used to carrying a lot of silver, or vending machines will need to be completely re-designed. And that will cost the consumer more in the long run.

Kcid Flhar
10 years ago

Ya right, like I want to carry around a couple pounds of coins everywhere. Hey, is that a roll of dollars in your pocket or are you just happy to see me?

Katie
10 years ago

I hope the treasury was smart enough to do it right this time. The problem with the other dollar coins they have tried is that they were silver-colored and too heavy. Vending machine operators will oppose this like crazy, but they are going to have to say uncle sooner or later. I hope they follow up soon with a light-weight $5 coin with two colors on each side.

50 MILES SOUTH
10 years ago

NO NO NO… this would make it dangerous when making it rain at the strip clubs. also stuffing a coin in a G string is hard to do. I mean.. really…. where are we to put them??????

Anonymous
10 years ago

Considering they already have a warehouse of the $1 gold coins, yes. In Europe they don’t even have 5 euro notes, everything 5 euros and below are coins. I was over there at one time and it was kinda fun paying for a small meal with two coins.

JBJ
10 years ago

PMX has given tons of cash to Tom Harkin. And who would supply the metal to make the coins? PMX

PMX also makes ammo but anti gun Harkin did not have a problem taking 1/2 million from them for his library

Anonymous
10 years ago

No, give up the dollar bill and soon the $5.00 bill will be the only norm. You know everything rounded up from $92.99 to %95.00, $99.99 to $105.00, %199.99 to $205.00, ect.

This has been tried before and people did not like the $1.00 coin.

Forget it!

dave
Reply to  Anonymous
10 years ago

thats because the Susan B Anthony dollar coin looked like a quarter and felt like quarter.The new dollar coin has a unique look and feel to it,plus being gold in color,you can tell it easily from other coins.I do not get your logic on rounding up to the 5 dollar part.That will only work if they do away with the penny,which they said they wont and I doubt that would happen,its just scare tactics.Coins last longer and cost less.Dig in your pockets look at the dates of the coins in your pocket,i have a 1964 and 65 quarter a 82 dime and bunch of 90s in pennys and nickles.The paper dollar does not last very long and no one can claim that.

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