It keeps turning up like a bad penny, as it were.
I have still never seen one of these
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.
The latest projection from the Government Accountability Office on the potential savings from switching to dollar coins entirely comes as lawmakers begin exploring new ways for the government to save money by changing the money itself.
The Mint is preparing a report for Congress showing how changes in the metal content of coins could save money.
The last time the government made major metallurgical changes in U.S. coins was nearly 50 years ago when Congress directed the Mint to remove silver from dimes and quarters and to reduce its content in half dollar coins. Now, Congress is looking at new changes in response to rising prices for copper and nickel.
The bit about changing the composition of existing coins in order to save money makes sense and is something I’d support. The rest is a story we’ve heard before, so I’ll just refer you to the points I made the last time this report was in the news. Brad Plumer echoes my arguments and adds some further information. As I’ve said before, I doubt anyone’s mind will be changed by any of this, so as always we’ll see what if anything comes of this.
How much money would we save if we stopped trying to ram dollar coins down peoples’ throats?
I’ve heard all of these arguments, and to me it comes down to this: a dollar now has less purchasing power than a quarter had in 1973 – my understanding is it’s the single lowest-real-value paper currency in the developed world – and the penny is worth essentially nothing.
So the natural solution: eliminate the penny and the $1 bill and replace them respectively with nothing and more $2 bills. The $2 bill will take the place of the $1 bill in cash drawers, and the coins will all move up one slot. Essentially the dollar coin becomes the new quarter.
The seigniorage argument is subtle and lost on most people, but if it’s true, then you can easily argue that we should replace the quarter with a 25 cent note – after all, many quarters end up in change jars; the same arguments (pro and con) should hold for quarters as for $1 coins.
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