In 2012 the GAO (Government Accountability Office) released a report that stated if the US were to switch from $1 bank notes to $1 coins the country could save $5.5 billion over a thirty year period, and roughly $184 million per year. While previous attempts to get the US interested in using $1 coins have ended with a certain degree of failure, new policies may be implemented to get the American people used to a coin, rather than paper.
Here are some reasons why we should make this simple change.
-Two thirds of Americans support replacing the dollar bill when informed of the potential government savings.
-Other major countries have benefited from replacing small denomination bills with coins. The smallest denomination bill in the EU is €5 (~$6.57); in Japan, ¥1000 (~$12.37); and in Canada, C$5 (~$5.05).
-Standardization: Other countries have already recognized the cost savings and benefits of the dollar coin, including Canada, the European Union and Japan.
-Cost Savings: In Canada, the federal government experienced cost savings ten times their initial estimate. (See page 6/7 of GAO report here)
-Denomination Size: The United States has one of the smallest denominations of paper currency among the major economies of the world (G-8 Countries). The average value of lowest denomination paper currency among other G-8 countries is $6.76. (See chart below)
-Coins are Recyclable: Coins are 100% recyclable. Scrap metal from the production process, as well as coins that become too worn for circulation, are melted and reformed into strip metal for minting new coins.
-Less Waste: Each year approximately 3.2 billion $1 bills are removed from circulation due to wear and tear. Most of these bills are shredded and most are deposited in landfills; that’s close to 7 million pounds of needless waste, enough to fill 900 dump trucks.
-More effective use of resources: Dollar coins have a lifespan of 35 years or more, while $1 notes last between 2 and 4 years. This means that, over the course of its lifetime, a single $1 coin produced for about 18 cents could replace up to 17 dollar bills produced for as much as $1.00.
-Private sector savings: The private sector experiences even greater cost savings and increased revenues from $1 coins. Jammed $1 bills in vending machines cost the 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 with high levels of cash transactions to process $1 coins versus $1 bills.
-Consumer ease: One $1 coin is lighter to carry than four quarters and is easier to use in vending machines, parking meters, Laundromats, transit fare machines, and other coin operated equipment. Four quarters weigh nearly three times more than a $1 coin (23g vs. 8.1g). According to the National Automatic Merchandising Association (NAMA), all vending machines manufactured in the last 20 years are equipped to accept $1 coins. And a 2007 survey showed that nearly all vending machines on federal property accept $1 coins.
-Increased accessibility for sight impaired: Current $1 coins were specifically designed to be more accessible to the blind and visually impaired. One dollar coins are tactilely different from other coins and thus distinguishable by touch. The $1 bill cannot be distinguished by visually impaired persons without costly assistive technology.
In 2012 the United States minted 5.8 billion pennies, at a cost of 2 cents per coin that totals to $116,000,000, while the combined monitory value of the pennies minted is only $5,800,000, that means the United States is losing $111,000,000 per year just by keeping the penny in circulation.
These simple reforms, may seem insignificant when your nation has a budget of $3.9 trillion, every dollar counts and this would be a first step on the way to reducing our deficit, and our debt in a responsible way.