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Wednesday, September 25, 2013
Is Doing Away With $1 Bill A Good Idea?
Periodically, someone gets the idea that we should replace the dollar bill with a $1 dollar coin. And, every time this comes up, we hear the same tired litany about how much money the government would save.

A December 3, 2012 Associated Press article in the L.A. Times is headlined:

Switching from $1 bills to coins is no small change

“A new plan to eliminate the note would save taxpayers about $4.4 billion over the next 30 years, a U.S. agency says. But Americans haven't embraced the coin.”

“American consumers have not taken to the $1 coin. But there's renewed pressure to eliminate dollar bills in favor of coins.”

“It's a simple matter of dollars and cents — congressional auditors say doing away with dollar bills entirely and replacing them with dollar coins could save taxpayers some $4.4 billion over the next 30 years.”

“This projection from the Government Accountability Office came as lawmakers begin exploring new ways for the government to save money by changing the money itself.”

“At a House subcommittee hearing Thursday, the focus was on two possible new approaches:

“Moving to less expensive combinations of metals like steel, aluminum and zinc.
“Gradually taking dollar bills out the economy and replacing them with coins.

“The GAO's Lorelei St. James told the House Financial Services panel it would take several years for the benefits of switching from paper bills to dollar coins to catch up with the cost of making the change.

Equipment would have to be bought or overhauled, and more coins would have to be produced upfront to replace bills as they are taken out of circulation.”

“But over the years, the savings would begin to accrue, she said, largely because a $1 coin could stay in circulation for 30 years while paper bills have to be replaced every four or five years on average.”

"We continue to believe that replacing the note with a coin is likely to provide a financial benefit to the government," said St. James, who added that such a change would work only if the note was completely eliminated and the public educated about the benefits of the switch.”

“Even the $1 coin's most ardent supporters recognize that they haven't been popular.
Philip Diehl, former director of the U.S. Mint, said there was a huge demand for a new dollar coin when production began in 2001, but as time wore on, people stayed with what they knew best.”

"We've never bitten the bullet to remove the $1 bill as every other Western economy has done," Diehl said. "If you did, it would have the same success the Canadians have had."

“Beverly Lepine, chief operating officer of the Royal Canadian Mint, said her country loves its ‘Loonie,’ the nickname for the $1 coin that includes an image of a loon on the back.

The switch went over so well that the country also went to a $2 coin called the ‘Toonie.’”

“Rep. Bill Huizenga (R-Mich.) affirmed that Canadians have embraced their dollar coins. ‘I don't know anyone who would go back to the $1 and $2 bills,’ he said.”

“That sentiment was not shared by some of his fellow subcommittee members when it comes to the U.S. version.”

“Rep. William Lacy Clay (D-Mo.) said men don't like carrying a bunch of coins around in their pocket or in their suits. And Rep. Carolyn B. Maloney (D-N.Y.) said the $1 coins have proved too hard to distinguish from quarters.”

"If the people don't want it and they don't want to use it," she said, "why in the world are we even talking about changing it?"

"It's really a matter of just getting used to it," Diehl said.

The AP also reported: “Congress looks at doing away with the $1 bill”
“American consumers have shown about as much appetite for the $1 coin as kids do their spinach. They may not know what's best for them either.

Congressional auditors say doing away with dollar bills entirely and replacing them with dollar coins could save taxpayers some $4.4 billion over the next 30 years.”

“Vending machine operators have long championed the use of $1 coins because they don't jam the machines, cutting down on repair costs and lost sales. But most people don't seem to like
carrying them. In the past five years, the U.S. Mint has produced 2.4 billion Presidential $1 coins. Most are stored by the Federal Reserve, and production was suspended about a year ago. (Posted by Staff)”
 
As usual, nothing is as simple as it appears to be – or as easy.
 
© 2013 Harris R. Sherline, All Rights Reserved
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