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The death of the $1 bill?

By David McMillin · Bankrate.com
Saturday, December 8, 2012
Posted: 7 am ET

As Congress looks for opportunities to save money, the Government Accountability Office recommends that lawmakers start by looking at what's in their own wallets.

A new GAO study highlights the potential cost benefits of replacing the $1 bill with a $1 coin. The extinction of the $1 bill could give the government approximately $4.4 billion worth of savings over the next 30 years. On average, the $1 bill has a lifespan of under five years while the $1 coin's durability gives it a lifespan of an estimated 30 years.

While the proposal may be cost-effective, it's not going to happen without the buy-in from a pretty important group: American consumers.

"For such a replacement to be successful, the $1 coin would have to be widely accepted and used by the public," the GAO writes.

That could be a big stumbling block. My colleague, Claes Bell, explained in a post last year that Americans tend to avoid using $1 coins. They cling to old habits, he wrote, and many of them simply refuse to fill their purses and pockets with coins.

Even if you convince consumers to use them, businesses would still need to make plenty of adjustments.

Banks, vending machine makers and others would need to find ways to replace the $1 bill with a coin.

The switch has worked in other countries, however. In Canada, the government saved $450 million in just five years by replacing the small-value bill with a coin. As headlines of the dreaded fiscal cliff continue to dominate the news, it's hard to ignore a proposal that carries great potential to cut government spending.

What do you think? Are you in favor of replacing a paper bill with a coin to save the government money?

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381 Comments
Mike Thomas
December 11, 2012 at 10:25 pm

Sure Tom J. lets just stop making the dollar bill one day. I'm glad you aren't the "decider" here. Do you want to really save money or only think we are? A decision needs to be made on the complete picture and a full implementation plan needs made if it really saves money. Nothing is easy and takes work. Us whiners are just not a rubber stamp to just any plan.

Chris
December 11, 2012 at 10:24 pm

I would say to the government stop making the useless presidential coins that nobody wants to collect and we are paying 600,000 USD per day to make them and where are they ending up....in storage...actually there are so many that nobody wants that they built another 5 million storage facility to house them all to sit and gather dust. Why, you ask is this happening...oh because of a bill that got signed and then everybody forgot about it & neglected to tell the fed to stop wasting money (600k per day) because it would take another bill to get them to stop making the coins. Oh the waste....doh! What is the catch these are $1 coins already being made starting in 2005 & nobody wants them or will use them! So trying another scheme with a different twist...worthless...especially since there is no new twist!

Tom J.
December 11, 2012 at 10:10 pm

The change to dollar coins should definitely be implemented. This can easily be accomplished by just stopping the printing of the $1 bill. There are many millions of the coins sitting in government vaults right now, ready to be shipped out to banks.

In addition to Canada using $1 and $2 coins, the European Union also uses 1 and 2 euro coins. Why are we are such whiners?

Bill C
December 11, 2012 at 9:58 pm

Over the past 40 years $1 coins have been tried and they never really caught on. The Susan B Anthony coin comes to mind. There were complaints that it was too close to the size of the quarter and was going to require vending machine companies to make adaptations. Next it was too heavy to carry in the pocket or purse. The cost of the adaptation was not popular. What may be practical and make sense economically couldn't compete with the habits of the general population. The $2 bill comes to mind too along with the 50 cent coin.

Mike Thomas
December 11, 2012 at 9:53 pm

Freakanomics radio (NPR) had a podcast on this last year. It doesn't really save money. In fact, the only way the goverment saves money is through you in seigniorage.
The coin cost more to produce than the dollar bill but the coin last longer. But what about all the coins you throw in a jar? That is where the goverment makes their money. That was proven when other goverments eliminated certain paper currencies. The GAO did not account for all the "costs" of the switch.

Cora
December 11, 2012 at 9:53 pm

I agree with the change, however, it would have to be a different size than the current gold coin. Too often that coin is confused with the existing quarter as they are the same size & look too similiar to each other. They use coins in England, maybe the government should look at how other countries & how they seperate their money by size.

ISAAC GRAHAM
December 11, 2012 at 9:45 pm

Its a no-brainer really. Something like this should've been done decades ago. The ignorance of such issues makes me suspect that theres a reason this hasn't been done yet. Furthermore; the government sucks!!!

Azhar
December 11, 2012 at 9:40 pm

I think this would be a great switch. After all, Americans ALWAYS complain of the government loosing a ton of money because of the president, so this would be a great money saver. And when the dollar bill is gone, we finally will not be annoyed of that moment when a machine won't accept your bill because it's crinkled. And anyone else who is more educated in this issue, will they just be taking out the dollar bill, or all bills period?

Rich
December 11, 2012 at 9:37 pm

I agree with the saving to use a doller coin instead of a bill. What about getting rid of the penny that costs more to produce then it is worth?

june leathers
December 11, 2012 at 9:32 pm

I would say that the $1.00 coin would be an excellent idea but it would have to be bigger then the quarter so that we wouldn't use the wrong coin. It would be great when using the vending machine because there are a lot of times the dollar bills don't work in the vending machine because it is too old or the corner might be bent so I think this something that should be looked into.