There’s a lot to like about $1 coins. They are more durable than paper money, and they’re easier and cheaper to handle. The only problem is, Americans hate using them.
Because of that, the Federal Reserve has literally entire warehouses full of unused $1 coins returned to them by banks because people don’t want them. From Robert Benincasa and David Kestenbaum at NPR’s Planet Money:
The federal government will stop minting unwanted $1 coins, the White House said Tuesday. The move will save an estimated $50 million a year.
Earlier this year, we reported on the mountain of $1 coins sitting unused in government vaults. The pile-up — an estimated 1.4 billion coins — was caused by a 2005 law that ordered the minting of coins honoring each U.S. president.
We calculated that the unwanted coins had cost taxpayers some $300 million dollars to make. There were so many coins piling up that the Federal Reserve was redesigning a vault in Texas to help hold them all.
We got to see a vault in Baltimore. It was the size of a soccer field, filled with bags of dollar coins.
On the merits, dollar coins are all-around better than dollar bills, but as long as you make them optional, rather than taking $1 bills out of circulation to force the change, Americans will kick them to the curb.
That’s true for a couple of reasons. First off, I think people in the U.S. have kind of stopped thinking of coins as real money. Most people seem to look at coins as “loose change” and “pocket change,” not holders of real value.
The other reason is that American men generally don’t carry an item that’s pretty much ubiquitous in places with valuable coins: a coin purse or wallet capable of securing coins. Whenever I’m in Europe visiting the Swedish branch of my family, I’m always struck by how pretty much every dude walking around over there has a coin holder, which is a real rarity in this country and in approximately the same class of coolness as, say, a calculator watch or Velcro shoes.
Of course, that problem would immediately be solved as soon as $1 bills were eliminated. While it might take a while for men to abandon their classy money clips, there are a few things people hate more than losing money. It would only take a few bucks rolling out of their pockets to make men reconsider the style characteristics of coin-carrying wallets.
But people like paper money, and they hate $1 coins, and Congress is having difficulty even mustering up the political will to keep the lights on at this point, so I don’t see it happening anytime soon. As a result, it’s probably smarter for the government to keep the $50 million.
What do you think? Do you like $1 coins?
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