Would You Use Dollar Coins if It Saved the Government $5.6 Billion?
From this side of the Atlantic it’s difficult to understand Americans’ love of the now-humble dollar bill. Here is a bit of paper worth only 62 British pence, and it is usually a grubby piece of paper by the time it gets into my hands.
Experts have calculated that replacing the dollar bill with a $1 coin, something that has been tried unsuccessfully for decades, would save the Treasury $5.6bn over 30 years. It’s a strong argument, but one that doesn’t seem to be getting much of a hearing.
There are billions of dollars’ worth of $1 coins sitting unused because the public has never taken to them. The problem is in giving people a choice. If you are going to change to a coin, it has to be done unilaterally and in the shortest possible time.
Nearly 30 years ago we in Britain had a similar dilemma. The current £1 coin was introduced in the face of a massive amount of criticism. It would devalue the currency, it was against tradition, said the old guard. But it has worked and no one would now want to go back to a £1 note. Until decimalisation in 1973 we even had a 10 shilling (50 pence) note and that, too, was a grubby beast once it had passed through a few hands.
Now, as a reflection on the sharp decrease in buying power over the last 20 years, we also have a £2 coin (worth just over $3). Europeans have followed suit with €1 and €2 euro coins and as far as I can see there has never been a call for the introduction of more paper money.
As I see it, the replacement of the $1 bill with a $1 coin is inevitable and it should come sooner rather than later. Either that or we all adopt Australia’s admirable plastic money.