Wyoming Senator Trying To Revive The Dollar Coin Yet Again
Senator Mike Enzi wants to replace the Dollar Bill with a coin. As with past efforts, it's a great idea that is unlikely to succeed.
Over at his own place, Dave Schuler takes note of a new bill introduced by Wyoming Senator Mike Enzi that once again tries to bring back the dollar coin, an idea that Congress and the Mint have tried to make succeed three times in the last 30 years:
CASPER, Wyo. — Sorry, George, can you spare the dollar?
U.S. Sen. Mike Enzi is co-sponsoring legislation introduced Tuesday that would phase out the $1 paper bill and replace it with a $1 coin. The move, the Wyoming Republican said, could save taxpayers billions and reduce the federal deficit.
That’s because coins last far longer than paper currency. Coins circulate for about 25 years, on average, while each $1 bill has an average lifespan of 4.7 years.
The switch would save about $5.6 billion over 30 years, according to a Government Accountability Office report issued last year.
Enzi also noted in a media release that most major western countries have already switched to higher-denomination coins. When Canada moved to the $1 “Loonie” coin 25 years ago, the release noted, the country saved at a rate 10 times initial government projections.
Proposals to scrap U.S. dollar bills for coins have been around since the mid-1980s, introduced by lawmakers primarily to benefit mining interests. But with the federal debt level approaching $15.3 trillion, the idea has received renewed attention in recent months.
But it’s unclear how receptive the American public would be to replacing the greenback with a dollar coin.
If past history is any guide, it’s not going to be easy to get Americans to accept this change. The Eisenhower Dollar had some minor success in that regard in the 1970s, mostly as Dave notes in his piece because it ended up being widely used in casinos in Nevada and elsewhere, but its large size made it impractical for every day use and the program ended shortly after the Bicentennial. The Susan B. Anthony Dollar was introduced to replace the Ike Dollar to much fanfare but quickly fizzled out, in no small degree due to the fact that it too closely resembled a quarter, causing confusion for retailers, vending machine operators, and the blind. Outside of numismatic releases, there were no other efforts to introduce a Dollar Coin until the Sacajawea Dollar in the early 2000s. Despite it’s difference color and size, though, that effort too failed miserable. Finally, and most recently, the U.S. Mint ended the Presidential Dollar Series for anything other than numismatic release due to lack of interest on the part of the public.
The one difference between these programs and the efforts in nations like Canada and the United Kingdom to replace their lowest denomination paper note with a coin is that none of them involved simultaneously phasing out the Dollar Bill. Without that change, there was no incentive for retailers or vendors to adjust their equipment to accommodate the new coin, and no incentive for consumers to use it. Enzi’s bill apparently tries to solve that problem by phasing out the Dollar Bill, but that may be what dooms it politically. Just as Enzi’s push for a Dollar Coin is motivated in no small part by the mining interests in Wyoming and other Western states, so too does the Dollar Bill have it’s protectors in Congress. The paper used by the mint to print currency is made by only one company, Crane & Co. of Massachusetts. When efforts were made in past years to tie the creation of a Dollar Coin to the elimination of the Dollar Bill, it has been strongly opposed, and ultimately blocked by the state’s Congressional delegation, including Senator John Kerry who last year introduced a bill to eliminate the Dollar Coin completely. So, despite the fact that it could save the country billions of dollars, don’t look for it to ever actually happen.
Just a brief note to comment that more interests than ‘mining interests’ have a stake in the price of gold.
The coin that Enzi proposes would not, I assume, be made of gold at all but of the same basic metals as other U.S. coins.
I hardly ever use cash for anything and would be just fine eliminating both paper and coins.
I’d like to see the penny eliminated with the paper dollar bill. It’s even more useless, and might make parts of the transition easier.
Not sure phasing out the dollar bill would be so bad if they increased production of the two-dollar bill. Wonder if they even considered that.
Also, I don’t see the dollar coin taking off until it’s actually spendable in coin-operated scenarios –vending machines, parking meters, laundry equipment, carwashes, etc. To do that would require a massive retrofit amongst millions of uncoordinated enterprises, and that’s not going to happen without some kind of incentive. The mere existence of dollar coins doesn’t provide that incentive. The market doesn’t provide that incentive as long as change machines stocked with quarters exist. Indeed, the only way such a retrofit would conceivably happen is through the force of law, either outlawing machines that don’t take dollar coins or providing tax credits and subsidies for upgrades…or a combination of both.
In today’s political climate, I don’t expect that to happen. And so I don’t expect the dollar coin to ever gain currency, so to speak.
Herb,
I haven’t seen a two dollar bill in circulation since I was a kid.
@Doug Mataconis: When I was a kid, if you saw a two-dollar bill it went into a drawer and was never spent because who knows when you’d see one again.
But I have seen them more and more lately, being spent in actual stores, and I’ve even received them in change. So they do circulate, albeit in extremely limited quantities. In world where you need two singles to buy a bottle of water, there’s room to circulate more I think.
Good point about the two dollar bill, if they are going to try and update the currency, might as well get the pain all over with at once.
I’ve called this an intelligence test for Congress. If they can phase out the paper dollar, and the cent coin, they pass.
Naturally, pundits who support the change pass too.
It’s a good idea for a million different reasons. However, as someone who has spent a lot of time in both Canada and continental Europe, I always hated how many fricken coins I had to carry around. Walking around with this huge, heavy, jangling mess of coins in my pockets was such a nuisance, it constantly annoyed me.
@Ben:
The modern dollar isn’t that big. And, if you care you can make sure you never carry more than 4 of them.
@john personna:
The Loonies and Toonies in Canada aren’t that big either, but it was still a pain in the butt. Back before the Euro, I spent a semester in Germany, and everything less than 20 marks were coins. That was ridiculous.
@Ben: You don’t own a wallet?
@That Other Mike:
Maybe he’s a youngster rockin’ the tight jeans 😉
@That Other Mike:
???
You mean a woman’s wallet? I’ve never seen a man’s wallet with a change pouch.
@Ben: Aw, bless. The heteronormativity of American men. Contrary to what you may believe, a wallet with a change pouch/section is no indication of your sexual preference, and they are not exclusive to women’s wallets.
@That Other Mike:
Fair enough. I didn’t say anything about sexual preference. And trying to twist what I said into some sort of implication that I am a macho-obsessed American homophobe is really weird. I’ve just never seen a man’s-style wallet with a change pouch. Every wallet I’ve ever owned basically just had a single horizontal divider for paper money, and card-slots. Thus, having to carry around a ton of change is always a major pain in the ass.
Interesting. I got a Sac-dollar in change from a vending machine a few weeks ago at work, so I’m skeptical that the changeover (in machines, at least) would really be all that big a deal.
Put me in the camp that’s for more dollar coins and two-dollar bills, and no more pennies or dollar bills.
I don´t have a change pouch. Considering that I´m required to carry LOTS of coins here in Brazil it also means that I lose lots of them.
I’ll agree to the dollar coin if we get rid of all pennies, nickels and dimes. Round everything to a quarter and I’m in.
The argument in favor of getting rid of pennies and paper dollars is very simple:’
What cost $1 in 1900 would cost $25.85 in 2010.
That 1900 penny was a quarter, that 1900 dollar was a twenty (plus). There was no need to divide down and lug smaller fractions.
We don’t need a $2 bill. Man up.
One reason dollar coins have not been successful because they haven’t been made easily available to the public. If you never got a quarter in change, and had to search for a bank that had them and then you had to wait while two tellers went back to the vault to get them, quarters wouldn’t circulate either.
Dollar coins are more convenient than dollar bills, faster to count, easier to use and would save us hundreds of millions of dollars a year. Get rid of the penny, too, and we’d save even more time and money.
Check out why the dollar coin is a good idea at the Dollar Coin Alliance web site .
@Ben: Why didn’t you spend them instead of letting them accumulate in your pocket? There’s no need to carry around a lot of coins; it’s just that since our coins are worth so little now, people pay with a bill and just get change back. Once we get rid of our low-denomination coins and bills, more people will actually spend their coins instead of letting them build up in their pockets (or big jars at home).
When Canada introduced the $2 coin in the mid-1990s, they didn’t have to make many quarters or dollar coins for the next few years because of this.
@Paul Anderson:
Not to mention a true coin hater would must use a debit card every time. That wasn’t even an option in 1900.
@Ben: “having to carry around a ton of change is always a major pain in the ass.” You should ‘change’ your pants more often. As for the wallet with the coin pouch, I got mine at Walmart. Very handy place for an extra key, guitar picks, discount tags, fetish objects.
Get rid of all coins and dollars. Issue a plastic card that accesses your national government account or private bank if you prefer. Wait, we already have that. The debit card.
Oh wait, the treasury and mints are private and pay stock holders dividends. So it won’t happen and we self implode with greed.