With the Congressional supercommittee working diligently to reduce the country’s debt by $1.5 trillion, it seems like any and all options are on the table.
And, according to a recent USA Today article, that includes replacing the $1 bill with a $1 coin.
I find this topic particularly interesting: In July, I did an article talking to local coin experts after reports emerged that there is $1 billion worth of unused $1 coins sitting in the Federal Reserve vault in Baltimore.
And two things stood out to me when writing that article:
- Everyone seems to agree that switching to a $1 coin would save money over time.
- But the American public just does not want to use the $1 coin. We just don’t like them as much as our dollar bills.
Michael Steinmetz, vice president of Steinmetz Coins in Springettsbury Township, summed it up nicely:
“If I went to a local merchant and handed them a bill, they will turn around and hand them to customer in line behind me, and so on. If I take a $1 coin to the same merchant, those coins will return to bank at the end of the day. Companies do not feel comfortable releasing $1 coins back into circulation because there is a negative perception of dollar coins in the public.
We are losing millions of dollars per year producing $1 bills. Look at other countries that have switched from paper to coin currencies, they’ve saved millions. It’s because coins last so much longer than bills.”
So where does this all leave this latest proposal to use the $1 coin?
The short answer is no one knows. Obviously, there’s resistance from the public and if the government just willy nilly mints $1 coins, we’re going to end up with more vaults filled with them. But other countries have had great success with just paper money from the market and forcing the coins on the marketplace. Eventually, these countries have reported amazing savings from the switches and have found the public adjusted well.
So, it’s up to the supercommittee to decide what they want to do. We’ll deal with it either way, I’m sure.
But one final thing to consider, as USA Today points out, is that even if the committee decides to invest in the coin, it won’t solve the country’s problems:
“The savings from a $1 coin are miniscule compared to the committee’s $1.5 trillion goal.”
