Is It Time For the US To Ditch the Dollar Bill? 943
coondoggie writes "It seems well past time that the U.S. ditch its $1 bill — considering such a move could save the country somewhere in the neighborhood of $4 billion. But there is much resistance, or perhaps a lack of real consideration of the issue from most people. Watchdogs at the Government Accountability Office this week testified before a Congressional hearing on the topic, and said dollar coins could save $4.4 billion over 30 years (PDF), or an average of about $146 million per year."
Came here looking for the Planet Money link (Score:5, Informative)
http://www.npr.org/blogs/money/2012/11/29/166103071/no-killing-the-dollar-bill-would-not-save-the-government-money [npr.org]
The short is: switching to dollar coins is both less convenient and more expensive than sticking with bills. It's surprising, given the much longer lifetime of coins, but unambiguous.
Re:I'll be the first to say... (Score:5, Informative)
That is so much crap. Within a few weeks of dollar coins being out vending machines would be updated. They are a business and need to be able to take your money. Canada converted to $1 coins and then $2 coins, lots of EU countries completely changed their currencies and things kept working etc. The gov might have to give incentives to help particular industries convert initially but over but the long term it will work out.
Re:Not yet... (Score:5, Informative)
It's a small price to pay for a nice body and a healthy sex drive, though.
Re:Not yet... (Score:5, Informative)
What I want to know is why the US has quarters instead of 20c coins.
I'll bet it's because the US dollar was modeled after the Spanish dollar, which was in turn worth 8 "reals" (aka "bits"), and was introduced centuries before decimalization came into vogue. That's why a quarter is still sometimes called "two bits".
Re:I'll be the first to say... (Score:5, Informative)
Re:Not yet... (Score:4, Informative)
The problem is the size and shape of the old dollar coins. They're very close to quarters in size and weight.
No, the problem is the size and shape of the newer dollar coins. For most of US history, dollar coins (orginally silver) up until the Eisenhower (71-78) were logically larger than half dollars.
http://en.wikipedia.org/wiki/Eisenhower_dollar [wikipedia.org]
It was the '79 Susan B. Anthony that started the quarter/dollar confusion.
Re:Not yet... (Score:5, Informative)
The British (technically, English) £1 note was abandoned before I was born, but here's an article from the time: http://www.guardian.co.uk/theguardian/2012/nov/13/pound-note-replaced-coin-1984 [guardian.co.uk]
And here's another: http://news.bbc.co.uk/onthisday/hi/dates/stories/november/12/newsid_2518000/2518637.stm [bbc.co.uk]
British coins are very easy to tell apart -- low-value (½p, discontinued), 1p and 2p are brown with plain edges, mid value coins are silver: 5p and 10p are thin and have milled edges, 20p and 50p are heptagonal with plain edges; £1 and £2 are gold-coloured and thick.
Re:Not yet... (Score:4, Informative)
In the US, dollar bills were never withdrawn from circulation. Nobody made you take coins, you could always have bills. And that's what everybody continued to use, while the coins sat in the vaults, untouched.
Re:End fiat currency! End THE FEDERAL RESERVE!!! (Score:4, Informative)
The gold standard wasn't the problem. The problem is that people weren't bright enough realize it is easier to divide the dollar to further decimal places than to divide a piece of gold.
Re:Not yet... (Score:4, Informative)
They never produced enough of the dollars coins plus the cowardly Americans never did have the balls to phase out the dollar bill while introducing the coins.
In the end all the dollar coins ended up at collectors.
Another way of saying it: They never even tried. They never even tried three times.
Re:I'll be the first to say... (Score:5, Informative)
You say that, but here in the UK, we introduced £2 coins ($3.2USD - must admit, I find a note for around 60p crazy, our lowest note is £5, or $8USD) and while, yes, there was a small period in which it was a little awkward, fast forward a few years and it was all sorted. It really didn't take long.
There are a lot of calls here to scrap 1p/2p coins, actually, as everyone doesn't really value them, and there is literally nothing you buy for less than 5p any more.
Re:End fiat currency! End THE FEDERAL RESERVE!!! (Score:3, Informative)
They also killed the Liberty Dollar, which was backed by silver and gold, calling its founder a "domestic terrorist". Seriously.
Re:I'll be the first to say... (Score:5, Informative)
Um, no. The vending machine industry (under the name Dollar Coin Alliance [dollarcoinalliance.org]) doesn't want to keep the dollar bill; they're the primary lobby for getting rid of it. To quote them, "Jammed $1 bills in vending machines cost the industry hundreds of millions in annual repair costs and lost sales."
Re:Not yet... (Score:4, Informative)
Sorry, this is complete crap.
I'm going to compare the USA 1,5,10,25,100 system against the very common 1,2,5,10,20,50,100 system (125 system, for short.)
By my calculation (done by hand, so may be a little out) to make all the quantities of change from 0 to 99, the USA system needs 470 coins, the 125 system needs 340 coins. The only quantities for which the USA system needs fewer coins are 25, 26, 35 and 36, for which it is one coin more efficient in each case.
If you took away the 2c coin to have 1,5,10,20,50 (i.e. a 20 and 50 instead of a 25 compared to the USA system) you'd still need only 420 coins (vs 470) for all change from 0 to 99c.
The 125 system works so well because the denominations are nearly equally spaced logarithmically. Starting with 1, you get the next denominations by multiplying by 2, 2.5, 2, 2, 2.5, 2. In the USA system, the multipliers are 5, 2, 2.5, 4. It is those large multipliers (5 and 4) which make the system so inefficient.
If you wanted to span the 1-100 range with just four coins, I believe 1, 3, 10, 30 would be optimal, as it is closest to logarithmic spacing. (Actually, 1,3,10,32 might be better, but that would be a real pain to make change with.) (Even more efficient would be a true logarithmic system: 1,2,4,8,16... or 1,3,9,27,81,... or 1,4,16,64,256... but none of these mesh well with our decimal system.)
On what evidence do you know "THE AMOUNTS MOST COMMONLY NEEDED"? Even accepting your unsupported claim "the very large majority of "change" needed is less than 50 cents", for each amount of change 0 to 49 cents, USA system needs 185 coins vs 145 for the 125 system, so you fail on this count too. If you remove the 2c from 125 and consider only change less than 50c (effectively removing the 50c from the 125 system as we'll never use it, so denominations are 1,5,10,20) then you *finally* get marginally ahead: 185 vs 190. Against this, the 125 system is about one coin better for every number from 50c to 99c, so your 'very large majority' will have to be greater than 90% to even get marginally ahead. (And remember, this is without the 2c, which the 125 system would normally have.)