Tuesday, December 13, 2011

Dollar Coin Problem

So the US has $1.6 billion in dollar coins sitting idle because people don't use them. The solution they are going with is to effectively stop making dollar coins. The proper solution, of course, would be to stop printing dollar bills.

Dollar coins would actually be cheaper in the long run than bills, because even though they cost much more to produce they last much, much longer in circulation. I wish I could find the study but my memory is that a $1 bill has a circulation life of maybe 3 months. A $1 coin would be much more like a quarter (if not longer) at 20 years. So figure at least 80 bills will need to be printed for every 1 coin.

Further, ending $1 bills could be an economic stimulus. Currently there are lots of vending and other machines that are designed to take $1 bills but not $1 coins (many now take both), they would need to be swapped out, which means companies like Coke putting more money into the economy than they need to at present.

Also, for all those worried about strippers and G-string problems: pretty much every civilized nation on the planet uses coins for the rough equivalent of $1 and $2 and they also have strip clubs so it certainly works.

This fits nicely with my End the Nickel (and End the Penny) "campaigns", and thinking back on ending the nickel, the odd thing is that, since we have a $0.25 piece, you there are only two denominations that are excluded with no nickel: $0.05, and $0.15. Any other amount of change can be made with just dimes and quarters...and if someone were really picky, if there is at least $1 available to break even the 5 and 15 cents can be covered. I really like losing the nickel.

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