The dollar coin intiative to replace the paper $1 bill has been around for more than two decades, but over the past year it has been gaining steam from both Congress and the public. A recent GAO study showed that replacing the paper denomination with a coin could save the government $5.5 Billion over the next 30 years, and Congress is currently in committee preparation to raise the issue in the 2012 budget.
On April 7th, the Republican Study Committee released its suggestions for the 2012 budget, and included in the document was a proposal to move from the dollar bill back to a dollar coin
Dollar coins have been in use in America going back to the beginning of our nation’s history. Originally backed by silver (90%), these coins were minted primarily with the precious metal until 1935 when afterwards they began to be minted with lesser valued metals. 1935 was also the year that Americans began a paradigm shift from primarily using dollar coins and instead moved more towards the Federal Reserve Note, or dollar bill.
Considered bulky, heavy, and harder to carry in large quantities, the move from dollar coins to the use of dollar bills was seen as a much easier way for the public to transport and pay for goods. However, over time the cost to create counterfeit proof currency has grown to the point where cost effectiveness is now at issue with convenience.
In 1990, the GAO did the same study on the use of dollar coins to replace the dollar bill as it did in 2011. Back then, the accounting office estimated that the government could save $318 Million dollars over a 30-year period.
The General Accounting Office said today that the United States could save $318 million over a 30-year period if a dollar coin replaced the dollar bill.
The report from the G.A.O., a Congressional research agency, was presented at a hearing of the House Banking Committee’s Subcommittee on Consumer Affairs and Coinage.
The G.A.O. noted that each paper note costs 2.6 cents to produce and lasts about 1.4 years. It estimated the dollar coin would cost 6 cents to make but last for about 30 years. – New York Times 1990
Twenty years later, the GAO’s study on replacing the dollar bill with a coin equivalent estimates a savings now of $5.5 Billion over the same 30-year period. This new study speaks pointedly on the rising cost of manufacturing the dollar bill, the process involved, and the inflationary effects on the materials used.
Outside of the government’s study to find ways to cut spending and save money in the next budget cycle, more and more public interest is growing to institute a coin instead of paper. With inflation rising, smaller coin denominations are losing value quickly. No longer are many vending machines selling products for less than a dollar, and the use of coins such as pennies, nickels, dimes, and even quarters are finding less items of value in their denominational ranges.
Recently with the renewed interest in the dollar coin, a coalition of diverse business owners have joined together to lobby for the replacement of the dollar bill with a functional alternative.
Jukebox operators and copper miners may not have much in common, but they do share a commitment to putting an end to the greenback dollar bill.
A quirky coalition that includes security giant Brink’s Inc., independent car wash operators and public transportation officials has fired up a decades-old campaign to replace the dollar bill with the dollar coin.
Many of the same players have been fighting for and against the change for years, but the economic and political climate has given coin supporters new hope. – rollcall.com
A final thing to take into account in today’s society is that most transactions are being done using digital currency, rather than physical money. Where in the past you would need to have dollars or exact change to go through toll road cashiers, now the same transaction is done electronically by a sensor in a window pass without ever having to stop to provide payment.
As inflation continues to devalue the American currency, and the cost of printing out dollar bills becomes less cost effective, the move to a dollar coin replacement becomes more enticing to several different aspects of society. The dollar coin initiative is not only gaining steam from both Congress and the public, but organizations such as the Dollar Coin Alliance are working with both Congress and the public to provide information and lobbying efforts to one day make the transition a reality.