Americans waste a lot of money because of their aversion to coins and their fondness for dollar bills.
If you travel almost anywhere else in the world, you won’t find the same irrational attachment to low-value paper currency. In Britain, if you pay for something with a 20-pound note, you’ll likely get 1-pound and even 5-pound coins in change. Canada, Australia, New Zealand, Japan and all major European nations have done away with their equivalent of the one-dollar bill.
But not America, where attempts to phase out the paper dollar have gone nowhere and dollar coins have failed to become popular. If a few members of Congress have their way, that could change.
Sens. John McCain, an Arizona Republican, and Mike Enzi, Republican from Wyoming, have introduced legislation to eliminate the dollar bill. Don’t think this is a partisan issue, though. Democratic Sens. Mark Udall of Colorado and Tom Harkin of Iowa, are co-sponsors.
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The Government Accountability Office has recommended the move for a long time. The reason is simple: Dollar coins, though more expensive to make, last much longer. The average dollar bill lasts only about four years. A dollar coin wouldn’t need to be replaced for 30 years.
That translates into potentially very large savings — as much as $13.8 billion over 30 years by some estimates.
Compared to the size of the entire budget, the annual savings might not seem like much, but it is real money, hundreds of millions of dollars every year that is simply wasted to appease an infatuation with paper.
So why has the legislation failed in the past? Politicians are afraid the American people, who have never embraced dollar coins, would be upset. This is one time where Washington really should ignore the will of the people, and elected leaders should lead.
The only way Americans will embrace dollar coins is if paper dollars aren’t an option. That’s become increasingly obvious as dollar coin after dollar coin has gone down in flames.
Some of this has been poor design. The original Eisenhower dollar coin was too large. The Susan B. Anthony was too easily mistaken for a quarter.
The presidential series of dollar coins the U.S. Mint began issuing in 2007 flopped, too, so badly that President Obama ordered the Mint to stop producing them in bulk as a cost-cutting measure. Nearly half of the coins had been returned to the Federal Reserve, leaving the Fed with nearly 1.4 billion coins to store.
Clearly, the only way Americans will use dollar coins is if they are left with no choice.
Maybe Congress simply needs to do a better job of selling the public on the notion and informing the American people of the benefits. Concern about purses and pockets getting weighed down with too many coins simply isn’t a valid reason to keep wasting so much cash on cash.
Polls show that Americans, when informed of the savings, do favor eliminating the dollar bill.
Here’s one final selling point Congress could use: Just think how much more the average change jar would be worth when it is cashed in.