Q: You recently found that the cost to change pictures on our paper money will be minimal. I’m curious as to how much could be saved if we eliminated the smaller paper bills. Paper currency surely doesn’t last as long as coins, right? While visiting Switzerland, I noticed that no paper money exists below 10 francs (about $10.30 U.S.). There were 1- and 2- and even 5-franc coins. The Euro, used by several European countries, was similar with no paper money below 5 Euros (about $5.70 U.S.). Sure, people would resist, but if we simply went through with the change (no pun intended), we’d adapt and it would surely save the mint a, well, mint!
F.C., of Glen Carbon
A: Sen. John McCain, R-Ariz., certainly thinks your idea makes cents.
Actually, he argues, it could make dollars — billions of them, in fact. That’s why last July 29, he and Sen. Mike Enzi, R-Wyo., again introduced legislation that would phase out the dollar bill in favor of a $1 coin.
In a press release, the two senators stressed that a coin would be “more sustainable and efficient” and, most important, would save American taxpayers as much as $13.8 billion. The provision was part of what they called the USA Act (S.1888). It called for the implementation of recommendations by the Government Accountability Office to save big bucks by reducing waste and improving efficiency.
“If you keep on doing what you’ve always been doing, then you are going to keep getting what you have,” Enzi argued. “What we have in our country is a huge debt. Overspending has put us in a deep hole. Changing to a dollar coin is one more rung on the ladder up.”
That’s what the Dollar Coin Alliance ( www.dollarcoinalliance.org) has been arguing for years. It’s a group of small businesses, mass transit agencies, budget watchdogs and trade associations which say they are devoted to saving us billions by promoting the transition to a dollar coin. Members range from the Snack Food Association to the American Amusement Machine Association to the American Federation of Government Employees.
It says such a switch could save us money in ways you maybe wouldn’t even think of.
Dollar coins would represent a huge savings over the bills we now use, it says. Most dollar bills last between two and four years while dollar coins have an average life of 35 years or more. Using these figures, a single dollar coin produced for about 18 cents could replace up to 17 dollar bills that cost $1 to print. That’s an 82-cent saving per coin.
As a result of their short lifespans, approximately 3.2 billion dollar bills are removed from circulation each year due to wear and tear. Most are shredded and wind up in landfills, adding 7 million pounds of waste — or about 900 dump trucks. Coins that become worn could be melted and reformed into strip metal for minting new coins.
But those are just the obvious savings. Have you ever found yourself stifling a string of epithets as you tried over and over to get a machine to accept one of those old, slimy, dog-eared dollars? It turns out that jammed dollar bills in vending machines cost that industry hundreds of millions in annual repair costs and lost sales. Evidence from the transit industry indicates that it is six times less expensive for businesses that deal with high levels of cash transactions to process coins rather than bills.
Some likely would argue that a pocket full of dollar coins would be heavy, bulky and less convenient than 10 bills neatly folded in your wallet. In response, the alliance argues that a dollar coin is one-third the weight of four quarters and is easier to use in vending machines, parking meters, laundromats and transit fare machines — especially now that smaller pennies, nickels and dimes are hardly worth carrying. According to the National Automatic Merchandising Association, all vending machines for at least the last 20 years have accepted dollar coins.
The argument that dollar coins are hard to distinguish from smaller coins also falls flat, the alliance maintains. As opposed to the dollar bill, current dollar coins were specifically designed to be more tactilely different and thus more easily recognized by the blind and visually impaired.
Add it all up and it’s no wonder that the GAO in 10 reports since 1990 have called for the elimination of the dollar bill. In 2012, the GAO reported the switch would save a minimum of $150 million per year or $4.4 billion over 30 years. Previous studies have said it might save as much as half a billion per year.
The higher figures might be correct. In Canada, the government said it experienced cost savings 10 times its initial estimate by making its $5 bill its lowest paper currency. Except for Russia, whose 50-ruble note is currently worth 75 cents, only the United States uses a paper bill that has a value of less than $5. A 1,000-yen note in Japan, for example, is $9.30.
Poll after poll has shown that anywhere between 61 percent and 73 percent of Americans favor the change when told about the potential cost savings, according to the alliance. Still, it all seems to fall on deaf ears in Congress. In 2011, Rep. David Schweikert, R-Ariz., proposed eliminating the dollar bill, but his own bill died. McCain and Enzi’s USA Act appears to be meeting the same fate. After being introduced and assigned to the Committee on Environment and Public Works, it has gone nowhere.
Along with our continuing love affair with the cent-piece, I suppose the alliance would say that we continue to be penny-wise and pound — or dollar — foolish.
True or false: The word “ye” actually should be pronounced “the.”
Answer to Friday’s trivia: So did you know which common musical instrument’s name means “wooden sound” in Greek? It’s the xylophone. If you remember your basic biology, “xylem” (from the Greek “xylon”) is a woody tissue that carries water and other nutrients from the roots of a plant to the stems and leaves. “Phone” comes from the Greek word for “voice” or “sound.” Put the two together and you get a musical instrument that is as much at home in classical orchestras as it is in jazz combos and marimba bands.