It must be hard out there for a low-denomination currency. The penny must continually weather the period efforts to legislate it out of existence, and now the dollar bill must contend with a new report that estimates the U.S. could save billions by phasing out paper bucks in favor of dollar coins.
The U.S. Government Accountability Office today re-ignited its long-standing campaign to convince the Treasury Department and the Federal Reserve to discontinue the dollar bill, releasing research that says the move would save the U.S. government $5.5 billion in the first 30 years.
"Since coins are more durable than notes and do not need replacement as often, many countries have replaced lower-denomination notes with coins to obtain a financial benefit," the study argues.
The GAO estimates that, though the government would initially lose money after such a change due to the costs of ramping up coin production, after four years the plan would produce a net fiscal benefit.
But would people really accept giving up their beloved green Washingtons in favor of dollar coins, which have failed to catch on a decade after their re-introduction? The GAO thinks they would, if they were forced to.
"Other countries that have replaced a low-denomination note with a coin, such as Canada and the United Kingdom, stopped producing the note," the report says. Phasing out paper notes "was essential to the success of their transition, ... with no alternative to the note, public resistance dissipated within a few years."(via Consumerist)