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)
