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Posted on 03/09/2011 1:27:21 AM PST by Jet Jaguar
Americans are a tight-fisted people when it comes to their dollars.
So in order to replace the paper currency with dollar coins -- a long-advocated move that could save the government an estimated $5.5. billion over 30 years -- the General Accountability Office called on Congress, the Federal Reserve and the Treasury to help yank the $1 note from circulation.
In the past 20 years, the GAO, Congress' investigative arm, has issued four recommendations for a switch to metal dollars in order to save all the money spent to replace worn-out dollar bills. Dollar bills last longer than they used to and now have a life span of up to 40 months. But the coins have an average life span of 30 years.
The most recent study suggests that if a transition to dollar coins began this year, the annual net benefits derived from the cheaper production costs of coins and their greater durability would exceed the initial startup costs of minting more coins by the fifth year. And over 30 years, it would save taxpayers an annual $184 million.
But so far, all the government efforts to get the public to use the more than 4 million dollar coins in circulation have met with only "moderate success," GAO official David Wise said in the latest report to Congress.
"The United States is one of the most conservative countries when it comes to the use of coinage," said Ute Wartenberg, executive director of the American Numismatic Society and a member of the government's Coinage Advisory Committee, a group of citizens that weighs in on currency policy and designs.
Several surveys commissioned by the GAO suggest that the public is wary of giving up its George Washingtons, simply because it's what they know and because they are reluctant to carry around more coins.
In the most recent survey, a Gallup poll conducted in 2006, 79 percent of respondents opposed eliminating the $1 note and replacing it with $1 coins. Even when respondents were told the replacement would eventually save taxpayers a lot of money each year, the opposition was still at 64 percent.
"You have to withdraw the actual dollar bills, because we already have plenty of dollar coins and no one even knows what they are," Wartenberg told AOL News. "They don't use them and people refuse to accept them."
That was how the British and Canadian governments dealt with similar popular challenges when they replaced their lowest-denomination notes in the 1980s. And once the notes were withdrawn, 1-pound coins, for example, quickly became the accepted norm in Britain.
The European Union, Australia, Japan and Russia, among others, have similarly dispensed with paper notes for their lowest denominations, and all have benefited financially.
The Canadian House of Commons initially estimated that its switch to coins for one Canadian dollar would save the government $175 million over the first 20 years. But Canadian officials later determined that between 1987 and 1991 alone, the savings totaled $450 million.
In Washington, though, it has been difficult to get Congress on board, in part because legislators from the South fear the end of paper dollars would be very tough on the cotton industry that supplies the Bureau of Engraving and Printing, Wartenberg notes.
Dollar production -- at a pace of 1.9 billion notes last year alone -- accounts for about 45 percent of the Bureau of Engraving and Printing's currency production.
In his report, the GAO's Wise said the agency has told Congress and the executive branch in the past that they "would have to lead rather than follow public opinion for a transition from the $1 note to the $1 coin to succeed."
"This point was reiterated by Canadian and U.K. officials we spoke with, who said that the only way to transition from note to coin is to stop producing the note," Wise said. "While observing that the public was resistant at first, they said that, with no alternative to the note, public dissatisfaction dissipated within a few years."
Wartenberg speculated that the increased popularity in recent years of the state quarter series -- with symbols of different states on the back of each new 25-cent piece -- might have helped by nourishing an affection for coins.
But, she added, "trying to change people's mentality is a difficult thing."
IMHO the COINSTAR change sorting machine was brilliant.
Coins are harder to counterfeit than paper money. Grocery clerk carefully inspected a $20 bill I handed her (from my bank)and added that even the banks are often fooled by them.
When the Brits went metric they swapped out farthings, halfpennies, pennies, threepennies, sixpences, shillings, florins, half crowns and guineas. It was a mess for the elderly - and the government had to allow the use of “old money” for them!!!! Of course the changeover devalued their money.
Is this reactionary? Do I "fear change"? Some might think so. But these are my thought processes when regarding things like same sex marriage and other controversial changes.
Here’s my plan. Retire the $1 bill and replace it with a coin. While we are at it, let’s retire the $5 bill and replace it with a coin, too.
We could call New Coin #1 a “Nickel” and make it out of some valuable metal. How about nickel? It has intrinsic value. That should work.
Next we could call New Coin #2 a “Dime” and make it, too, out of some valuable metal. How about silver? It has intrinsic value, too. That would work.
Next, retire the current penny and nickel and replace them with a New Penny. We should make it out of a valuable metal with intrinsic value, say copper. That should work.
Then let’s change the numbers on the remaining bills in circulation by lopping off a zero. So the current $10 bill becomes a $1 bill and the current $100 bill becomes a $10 bill.
Lastly, let’s reintroduce the $1,000 bill, but lop off a zero there, too and make it the New $100 bill.
Voila! We would be back where we were about 40 years ago with regard to the value of the coins and currency in proportion to your labor and wealth. There seems to be a natural human inclination or value-breakpoint where people prefer to keep money in paper or metal form. Government cannot break this inviolable rule (but it will try).
Of course, when we introduce this “new” currency, we’ll have to lop a zero off your income and a zero off all your bank accounts. But at least this will forestall us from getting Trillion dollar notes from the asswipes in Washington for a little while.
We already have dollar coins — the Presidential series. They are heavy, flashed gold color, and look like a quarter. I don’t like them at all.
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1) The new 50¢ coin should be circa 27 mm in diameter.
2) The new $1.00 coin should be circa 29 mm in diameter.
Since the current quarter is 24.26 mm in diameter, this would make it easier to identify the new coins I suggested by hand feel.
And before everyone throws brickbats at me, it should be noted that the closest "equivalents" of a single US dollar, the British £1, the European €1, and the Japanese ¥100, are mostly circulated in coin form, not as paper currency.
Well no more origami elephants for tips then.
I’m all in favor of the dollar coin.
When the Golden Dollar came out several area merchants used them. I found it easier to reach in my pocket for a couple dollars instead of pulling my wallet and looking for singles, besides – what can you buy with a dollar? People complain about having their pockets weighted down with coins. I seldom have more than three or four singles in my wallet – how much weight is that?
As for sticking coins in a dancer’s g-string, here we’re not allowed to have any physical contact with the dancer. The tip goes on the stage. I never had a dancer complain about dollar coins, a dollar is a dollar.
Gas prices have gone down in real money from 1970. Keep on stackin.
If they remove the folding cash and replace it with metal, let’s hope that they don’t do what the Europeans did. The Euro has a nickel content so high that it makes the hands of cashiers and other people who handle money daily break out in a rash from the nickel exposure.
” And before everyone throws brickbats at me, it should be noted that the closest “equivalents” of a single US dollar, the British £1, the European €1, and the Japanese ¥100, are mostly circulated in coin form, not as paper currency. “
And your contention is what??
That the use of coin instead of paper makes the quality of life in Britain, EU, and Japan sufficiently superior to ours that it must justify the Government foisting yet another unpopular, and demonstrably unwanted, ‘Change (we can believe in)’ on we-the-people??
Just what I need, $200 worth of coins in my pocket........
They'll claim the NORKs got it all wrong, and only their regime knows how to do it right.
I travel to Canada a lot and love the $1 and $2 coins. Very convenient. I'm okay with this idea.
How about polymer banknotes?
Very interesting! Thanks for the link.
You can say the same thing about the penny. There are millions or perhaps billions in circulation already; how much money would the mint save it it just stopped making them?
Of all the thousands of these SAB coins I have seen, I’ve yet to see her smile. What’s her problem anyway?
That's why I would like to eventually see the US$1 paper currency replaced by the 27 mm 50 cent coin and 29 mm US$1 coin like I suggested--constantly printing US$1 bills and having to replace them every 18 months ends up being a big waste of time and resources, in my opinion.
as they slowly convert to a NAU COIN
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