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.
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?