Updated April 3, 2012, at 3:50 EDT.
There was a sad day late last year for those who enjoy the heft of $1 coins in their pocket. Because there are so few of you, the government abruptly halted the mass production of $1 Presidential coins, right after the James Garfield dollar and just before the Chester A. Arthur coin.
Ending the program will save the U.S. government $50 million a year in production and storage costs, the Treasury Department said. About 1.4 billion unwanted Presidential dollar coins are taking up space in Federal Reserve vaults around the country. (New Presidential coins will be minted for sale to collectors at higher than face value.)
People are funny about money. Though it makes economic sense to replace flimsy $1 bills with sturdy coins, they want no part of it.
Americans, that is. Canadians use the $1 "loonie" coin and the $2 "toonie," and Europeans have their one and two euro coins. Yet, we resist. "I suspect the biggest limitation is that people don't like change (pun only sorta intended)," "Nickel" at FiveCentNickel.com wrote.
Why haven't Americans embraced the dead presidents or other $1 coins? Some possible explanations:
Dollar bills are still being produced. "The Fed policy has been to promote the dollar bill and the dollar coin, and Americans have consistently chosen the dollar bill," U.S. Rep. Kevin Yoder, R-Kan., told USA Today. There is no one euro bill or Canadian $1 bill. Those folks aren't given a choice.
It would take an act of Congressto phase out $1 bills, and we all know how that goes. Congress in 2005 mandated the mass production of the Presidential coins, starting in 2007 with George Washington. (The Treasury secretary has the authority to alter that, and did.) But Congress hasn't seen the need to get rid of the dollar bill (or the much-maligned penny).
According to Politico, the Dollar Coin Alliance, representing industries that would benefit as well as other groups, isn't giving up its fight to phase out the paper dollar. Others say it's time to move on, for now.
"Elimination of the dollar bill has been a long-time goal for the vending industry, but congressional opposition was too strong. At this point, it makes little sense for the vending industry to expend any resources on this effort," VendingMarketWatch opined. Post continues below.
They weren't promoted enough, and maybe the depiction of dead presidents wasn't the best choice. Quarters featuring each state were very popular, but a coin honoring Andrew Johnson?
We don't understand the benefits. Using dollar coins instead of bills would save the government an estimated $5.6 billion over 30 years, according to a Government Accountability Office report (.pdf file). That's because coins, though more costly to produce, last longer than bills -- up to 40 years vs. an average of 18 months.
We like dollar bills. Dollar bills are light and fit nicely in a wallet. Dollar coins would necessitate a bigger change purse -- or more frequent use of credit or debit cards. A poll by Lincoln Park Strategies (.pdf file) found that 76% of Americans oppose the demise of the dollar bill.
On the other hand, the Dollar Coin Alliance maintains: "A January 2011 poll conducted by the Tarrance Group and Hart Research found that Americans favor the transition to a dollar coin by a two-to-one margin once the potential government savings are explained."
We have no idea what to do with dollar coins. Vice President Joe Biden said 40% of the Presidential coins have been returned to the Fed. That's enough to last for 10 years, given the current rate of use. Many people say they've never seen one.
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I got one as a prize at the supermarket and later left it as part of a tip. I bet that waiter was thrilled.
Wrote Chelyen Davis on Fredericksburg.com:
In my wallet is a dollar coin. It looks like a quarter, except it's gold and has Ulysses S. Grant's face on it. I got it from an automated change machine in a Richmond parking garage, and frankly I wasn't sure anyone else would take it, because I haven't seen anyone use dollar coins.
What's your preference? Should we switch to coins and retire the dollar bill?
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