The Dollar Coin Isn’t Worth A Plugged Nickel

I occasionally get press releases from the Dollar Coin Alliance, a group devoted to, as you might suspect from its name, having a coin replace the bill as the $ 1 currency in the U.S .
besides as you might suspect, DCA members include companies that stand to significantly benefit financially if this change occurs because they will be the ones who will sell the raw materials to the government that will be needed to mint the millions of extra coins that will go into circulation .

The DCA doesn ’ t say anything about making more money, of course. Rather than talk about what they will make from the extra sales to the government, it focuses rather on what purportedly will be significant – as in billions of dollars – of savings for taxpayers.

here ’ s the problem : The dollar coin supporters are wrong. All things considered, a dollar mint is far more probably to increase quite than decrease the federal budget deficit and cost preferably than save taxpayer dollars .

Before I explain why this is the font, you should know why I ’ thousand qualified to make it .
In 1999 and 2000, I led the consulting team that helped the U.S. Mint introduce the “ Golden Dollar ” – the one with the image of Sacagawea – into circulation. Our surveys at the time showed that the Golden Dollar was a huge hit with consumers but was resoundingly rejected by businesses. Retailers didn ’ triiodothyronine want to pay the extra cost of having the coins delivered to their stores. Vending machine owners didn ’ metric ton want to pay to have their equipment retrofitted so that they would accept the coins ( they wanted the government to foot the bill ). Banks, which hush had a big hoard of the much-reviled Susan B. Anthony, wouldn ’ deoxythymidine monophosphate guarantee a paradiddle of dollar coins would all be golden Dollars. even some transit systems – including Metro in Washington, D.C., refused to change their equipment to accept the coins .
When consumers didn ’ thymine get them as change and banks basically refused to distribute them, the Golden Dollar went down in history along side the Susan B as the Edsels of U.S. coins .
No doubt pushed by the Dollar Coin Alliance or some alike organization, that minus feel didn ’ thyroxine stop Congress and the White House from mandating yet another dollar mint. so in 2007 the Mint started issuing five new dollar coins a year, each with the trope of a president. That program, which purportedly produces circulating coins, is presently scheduled to continue through 2016 .
Which brings me back to the Dollar Coin Alliance and it ’ s latest press release .
In one sense the claim that switching to a dollar mint will reduce the deficit is true. It does indeed cost less to keep a mint in circulation for 30 years than a charge because a note will wear out and have to be replaced multiple times over the lapp period that one coin will survive.

But savings alone occur if the coins replace bills as circulating currency. If dollar coins are an alternative rather than a utility, that is, if the U.S. Mint manufacturers them at the lapp time the Bureau of Engraving of Printing keeps making dollar bills and the coin and bill are in circulation at the same time, the presume savings not alone disappear but turn into extra costs .
intend of it this way : That more fuel-efficient car the salesman wants to sell you will only produce the promise savings if you get rid of the gas-guzzler you ’ re drive immediately. But if you keep driving your foremost car and buy the second thus your adolescent daughter or son can immediately drive to wherever she or he wants to go, you have actually increased rather than decreased your costs .
There is no cause to think that the economic forces that prevented the Golden dollar from succeeding about a decade and a one-half ago have changed. Will the businesses that refused to pay to have the coins delivered in 2000 now be uncoerced to reduce their own profits by doing sol ? Will banks regulate the dollar coins from the Federal Reserve if they already have a larger-than-needed supply in of Susan B ’ south, Golden Dollars and presidential dollars than their customers want ?
And with what you can buy for a dollar today being far less than what it bought 14 years ago and credit cards now increasingly being used for even the smallest purchases, is there any reason to think that consumers will be any more bequeath to carry a pocketful of dollar coins immediately than they were before ?
The Dollar Coin Alliance deals with these bottom line basics with misdirection. Its urge turn says that more than 4.5 billion dollar coins are “ in circulation. ” That ’ mho mislead. That many dollar coins may have been distributed by the Federal Reserve, but they are far more likely to be in individual bank vaults, hidden in couches or underwear drawers and kept in a collection than they are to be used in everyday department of commerce. other than by mistake or from a U.S. Postal Service cast machine, when is the concluding prison term you got a dollar mint in change ? ( And if you did get one, how much did you immediately give it second to the clerk and ask for a placard alternatively ? )
More mismanagement : The acquittance besides states that the Treasury data “ debunks the myth…that the Federal Reserve vaults are filled to brim with dollar coins. ” It doesn ’ thymine citation, of course, that the vaults of Citi, Bank America, Wells Fargo, PNC and early banks are still sated with the Susan B.s and Golden Dollars, not to mention some of the first 30 presidential dollars that have been issued. It besides doesn ’ deoxythymidine monophosphate mention that a good phone number of the coins that purportedly are circulating are in the hands of numismatists .
But the biggest thing the exhaust doesn ’ t say is whether the Dollar Coin Alliance is pushing for legislation that will do the one thing that would validate most of its early claims — eliminate the dollar bill. That ’ s not surprising given that Congress has shown no indication it ’ s bequeath to do that during the now hanker history of the dollar mint.

And without eliminating the bill, DCA ’ s push for the coin becomes nothing more than an feat to increase sales to the government at taxpayer expense .

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