Is It Time For the US To Ditch the Dollar Bill?

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Is It Time For the US To Ditch the Dollar Bill?

Posted by Soulskill on Friday November 30, 2012 @09:50AM from the i-volunteer-to-collect-them dept.

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."

21 of 943 comments (clear)

I'll be the first to say... by thesameguy · 2012-11-30 09:51 · Score: 5, Funny

Dollar coins at the strip club sounds both dangerous and hilarious.
1. Re:I'll be the first to say... by tverbeek · 2012-11-30 09:55 · Score: 5, Insightful
  
  That will just bump the tips up to higher denominations.
  
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2. Re:I'll be the first to say... by ILongForDarkness · 2012-11-30 10:53 · 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.
3. Re:I'll be the first to say... by tverbeek · 2012-11-30 10:58 · Score: 5, Insightful
  
  From what I've heard, vending machine manufacturers and operators hate dollar bills. Those scanners are easily faked out, but also have a high false-negative rate, get jammed with damaged bills, frustrate customers whose bills aren't new enough, etc. Vendors only started adding them to machines because they didn't want people to have to feed half a dozen (or more) coins into a machine to get a Pepsi.
  A one-time conversion to accept $5 and $1 coins would result in much less hassle for the vending machine folks, because coin-counting devices are fairly difficult to fake out (you can't produce counterfeit metal quarters with a computer and inkjet printer) and much more reliable.
  
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4. Re:I'll be the first to say... by Boycott+BMG · 2012-11-30 10:59 · Score: 5, Informative
  
  This might be correct if the dollar coin were a new thing, but dollar coins have been in circulation since the Carter administration. Vending machines that take the Susan B. Anthony dollar should also take the newer Sacagewea dollars and Presidential dollars, because they were manufactured to be electrically compatible. So any vending machine that has been updated since the 80s should accept dollar coins.
5. Re:I'll be the first to say... by SEE · 2012-11-30 12:33 · Score: 5, Informative
  
  Um, no. The vending machine industry (under the name Dollar Coin Alliance) 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."
Not yet... by broggyr · 2012-11-30 09:52 · Score: 5, Insightful

Not gonna happen; we still have pennies, for chrissakes!

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1. Re:Not yet... by redback · 2012-11-30 09:58 · Score: 5, Insightful
  
  This will not happen until Americans can let go of their irrational attachment to dollar bills and pennies.
  In Australia we ditched $1 and $2 notes for coins in 1984 and 1988. 1c and 2c coins were dropped in 1992.
2. Re:Not yet... by boristdog · 2012-11-30 10:04 · Score: 5, Insightful
  
  Yeah, my wife bitches when I say we should get rid of pennies and just have purchase totals rounded up or down to the nearest five cents.
  Her: "But the retailers will price everything so it gets rounded up!"
  Me: "No, multiple item purchases will make it just as likely to round down, and that's only for cash transactions."
  Her: "But I still may pay more when I go to the store!"
  Me: "Uh yeah, If you make 10 CASH transactions per week you might pay about 30 cents more per week, or about $15/year."
  Her: "It's a way to rip me off!"
  She makes over $100K/year. People like her are why we will always be stuck with pennies.
3. Re:Not yet... by Anonymous Coward · 2012-11-30 10:04 · Score: 5, Funny
  
  In Australia we ditched $1 and $2 notes[...]
  In the USA, we still like to pretend our currency has value.
4. Re:Not yet... by SuricouRaven · 2012-11-30 11:05 · Score: 5, Funny
  
  I'd use $0.04, $0.08, $0.32, $0.64 and $1.00 coins. But I'd also have 128 cents to the dollar, for I like round numbers.
5. Re:Not yet... by mark-t · 2012-11-30 11:38 · Score: 5, Insightful
  
  The reason it failed was because the USA didn't actually make the decision to stop printing $1 bills.
  Canada initially made a similar error when we introduced the loonie here. The $1 bill was not actually removed from circulation (they only reduced the number of $1 bills printed) for a number of months after the coin's introduction, during which the $1 bills that existed were wearing out faster (because people preferred them to coins and would use them so much more frequently), and this necessitated the mint printing more than initially estimated. The solution, Canada determined, was to discontinue the $1 bill entirely and increase production of the $1 coin to compensate.
  It worked.
  
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6. Re:Not yet... by xaxa · 2012-11-30 11:44 · 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
  And here's another: http://news.bbc.co.uk/onthisday/hi/dates/stories/november/12/newsid_2518000/2518637.stm
  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.
7. Re:Not yet... by Guppy06 · 2012-11-30 13:53 · Score: 5, Insightful
  
  We've tried to replace the dollar with coins three times so far, and it's failed.
  We've never been without dollar coins, since 1776. It's the greenback that's new.
  
  The problem is the size and shape of the old dollar coins. They're very close to quarters in size and weight.
  Until coins marked 1965 and newer, all reeded US coins (dimes, quarters, halves, dollars) were 0.9 fine silver; the reeding was to discourage filing of the precious metal. The values of the coins were based on their weight in silver, a ratio (though not their original weights) that persists today: a half-dollar weighs as much as two quarters, which weighs as much as five dimes, and any combination of all three that equals $20 weighs 1 lb avoirdupois.
  After all circulating coins were reduced to base metals, the Eisenhower dollar coin was introduced in 1971. However, it was the same size as the old (true) silver dollars, weighing as much as four quarters, proving to be an unwieldy size. This large size made sense when they were minted of precious metal, but not so much with base metal. It failed to catch on.
  (Meanwhile, the half-dollar fell out of common circulation, because everyone obsessed over JFK.)
  The Anthony dollar of 1979 was an effort to fix this. In order to distinguish it from other denominations, it was originally going to be a different shape: a curve of continuous width, with 11 sides (in honor of Apollo 11, whose mission patch was on the reverse). This original feature can be seen in the artwork of the coin, with both the obverse and reverse having a hendecagon inscribed around the edge. However, coin-operated machinery operators were concerned about the reliability of their equipment accepting such an unusual shape at the time, resulting in a last-minute change to a circular coin.
  It should be noted that Canada essentially copied the Anthony dollar's original design in their current "loonie," only changing the color. The number 11 doesn't hold the historical significance to Canada as it does to the US, but the loonie has 11 sides just the same.
  
  So when it came time for serious attempt #2 (Sacagawea dollar) the coin still had to be the same size and shape or every vending machine would have to be replaced.
  As noted above, the loonie is the same thickness and diameter as the Anthony dollar. In addition to this, Canadian pennies, nickels, dimes and quarters are also the same size and shape (and color) as US coins of the same denomination. (Half-dollars are different, but are rarely seen in either country regardless.)
  Because of this, coin-sorting equipment can be made to easily switch between US and Canadian coins, which only really differ in weight and metallurgy (i. e. magnetic signature). Keeping the newer golden dollars the same size and shape as the Anthony dollars wasn't just a matter of backwards-compatibility but cross-compatibility as well. The yellow color of the golden US dollars also continues the trend of using the same colors for the same denominations.
  The real issue for the golden dollar was maintaining the same magnetic signature as the Anthony dollar, in spite of using a different color alloy.
  
  And it still felt like a quarter in your pocket.
  Until you feel the smooth edge. It doesn't have the loonie's corners, but it's still easily distinguished from quarters by touch, just as you can distinguish between quarters and nickels, and between dimes and pennies.
  
  We're trying again with the Presidential Dollar Coins.
  Past tense. Production was halted prematurely this year, with Grover Cleveland's first term.
  Besides, they were always intended as a limited issue, much like the "50 State Quarters" program. Sacagawea dollars were minted alongside them, along with some special, limited-issue reverses reflecting "Native American heritage." The only permanent change is moving "In God We Trust" from the edge-printing to the obverse, after a certain well-publicized snafu with the Presidential dollars.
Came here looking for the Planet Money link by guises · 2012-11-30 10:00 · Score: 5, Informative

Planet Money did a whole podcast on this. Don't see anyone linking to it, so here's the most current thing:

http://www.npr.org/blogs/money/2012/11/29/166103071/no-killing-the-dollar-bill-would-not-save-the-government-money

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.
Value of $1 by SirGarlon · 2012-11-30 10:07 · Score: 5, Insightful

According to Wolfram Alpha, $1 in 1950 had the approximate purchasing power of $9.54 today. So the dollar is the new dime. Pop quiz: did it make sense to print ten-cent notes in 1950? (Hint: no) Then why retain the $1 bill today?

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Re:Not again by Guspaz · 2012-11-30 10:14 · Score: 5, Insightful

It doesn't matter if anybody wants them or not, the solution is simple. Start making one dollar coins. Stop making one dollar bills. Very quickly, your entire economy has switched.
That's what happened in Canada. What, you think there wasn't resistance when we eliminated our one dollar bill or two dollar bill (which was far more commonly used than in the US)? Of course there was. And it didn't matter, because people didn't get a choice. The government decided they wanted to save money, so they did. It's not an election-level issue, so they could do that sort of thing.
The only reason that the dollar coin has not succeeded in the US is because the US government doesn't know how to do such transitions.
Re:pace by Shadow+of+Eternity · 2012-11-30 10:21 · Score: 5, Insightful

We have a government where powerful politicians can openly claim that significant scientific theories are "lies from the pit of hell", and that came up with the TSA and Gitmo. They're inefficient and slow on purpose, do you really want these people to be able to take significant actions quickly and efficiently?

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we still don't have metric for chrissake by circletimessquare · 2012-11-30 11:25 · Score: 5, Insightful

if you hadn't noticed, there's a particularly loud virulent strain of "oppose all common sense progress as evil" in the USA
i know such stubborn blockheadedness isn't unique to the USA. but they seem more powerful here. how do other countries quash this loud ignorant sort?

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1. Re:we still don't have metric for chrissake by __Paul__ · 2012-11-30 12:34 · Score: 5, Insightful
  
  how do other countries quash this loud ignorant sort?
  Free education.
  
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Re:MOD PARENT UP!!! by alexander_686 · 2012-11-30 14:50 · Score: 5, Insightful

No, it causes deflation.
Gold is basically fixed in quantity. Mining has little effect on the overall supply.
As the economy grows and the money supply is fixed, the value of money increases.
This shifts wealth to those people who hold cash, a non-productive asset.
This increase real interest rates, deterring investments in productive assets.
It is a horrible, horrible thing.
See “A Monetary History of the United States “ by Milton Friedman