Recently, Congress reintroduced a bill that would push for a dollar coin to replace the dollar bill. The chief argument for switching to coin dollars is the durability of coins versus paper money.
Since dollars are heavily used, they don’t last as long as other denominations of paper money. The average lifespan of a dollar bill is only a little over four years. Coins, on the other hand, have a lifespan of roughly 30 years. Consequently, the switch to dollar coins in currency would mean lower production costs for the treasury.
The Pros and Cons of Dollar Coins
This step, although initially increasing the U.S. Treasury’s currency production costs from 5 to 18 cents per dollar, would save the treasury (and taxpayers) over 13 million dollars in the next 30 years. Since the switch seems like a win-win proposal, why hasn’t it already been done?
While there are dollar coins in circulation, they’re not widely used. The silver Susan B. Anthony dollar coin released in the 70s didn’t stick, and neither did the gold Sacajawea dollar coins released in 2000 (although they were pretty).
For the businessman, the biggest downside to using coins is that they’re heavier and bulkier, and therefore, less convenient to carry and less cost-effective to mass-transport. Changing to dollar coins would also force businesses and financial institutions to convert equipment to accept the new currency, which would be a time- and money-consuming project.
Stop and think… do you have even one dollar coin in your possession? If you do, it’s probably part of a coin collection. People prefer dollar bills simply because they’re easier to deal with. Faced with a choice, Americans choose the bill over the coin.
But considering that the United States is one of the few remaining Western Hemisphere nations with a paper dollar, it’s obvious that switching to dollar coins is becoming popular enough to catch on. Some think that if we removed dollar bills from circulation and replaced them with coins — thereby forcing the use of coins — it would soon become the new normal.
How the COINS Act Could Affect You
The bill, known as the Currency Optimization, Innovation, and National Savings Act (COINS Act) is yet another way the government is trying desperately to save money and avoid increasing the trillions of dollars in national debt.
Both political parties seem to agree that this bill would be a small way to save millions of dollars over the next several decades — a drop in the bucket compared to the necessary spending cuts to salvage the debt crisis — but a drop nonetheless.
If the bill passes, you may soon need to upgrade the size of your coin purse. Then again, much of our society has already become nearly cashless, so changing the currency may not impact consumers and businesses as much as it would’ve a few decades ago.
Changes to currency are a sign of changing economies, as evidenced by some nations’ removal of the penny from circulation, due to inflation. The current face of global commerce, when paired with the need to tighten the nation’s spending, may work together to create the conditions necessary for a successful dollar coin conversion.
Dollar bill or dollar coin… what do you prefer?