From the AP:
WASHINGTON (AP) — American consumers have shown about as much appetite for the $1 coin as kids do their spinach. They may not know what’s best for them either. Congressional auditors say doing away with dollar bills entirely and replacing them with dollar coins could save taxpayers some $4.4 billion over the next 30 years.
Vending machine operators have long championed the use of $1 coins because they don’t jam the machines, cutting down on repair costs and lost sales. But most people don’t seem to like carrying them. In the past five years, the U.S. Mint has produced 2.4 billion Presidential $1 coins. Most are stored by the Federal Reserve, and production was suspended about a year ago.
The latest projection from the Government Accountability Office on the potential savings from switching to dollar coins entirely comes as lawmakers begin exploring new ways for the government to save money by changing the money itself.
How about telling the Federal Reserve to stop printing it, geniuses? Or how about you stop spending it on everything, inflating the currency, and devaluing that dollar bill to begin with?
$4.4 billion over 30 years is meaningless for several reasons. First, it’s projected savings that’s contingent on other economic policies staying the same. With inflation, that $4.4 billion could be higher or lower. Second, that’s $146 million per year, which won’t amount to a drop in the bucket, but will have extensive costs for consumers to adjust; as well as setting us up for greater inflation where $1 is a coin and not a bill. There’s a tangible feeling in how going from coins, which are fractions of the dollar, to a dollar being a coin is showing that the money is devalued. Third, that’s projected savings… that Congress is just going to spend elsewhere.
It’s like a fat guy saying “well, I’m going to cut out Twinkies since Hostess is gone, so now I’ve got an extra 500 calories a day”. Y’know what the fat guy is going to do? He’s going to eat 500 calories worth of something else. Congress is going to change something for the sake of changing it, subtly contribute to inflation of goods and services (think pumping meaningless $1 coins into a vending machine for an $8 soda like in The Running Man). Coins are fractional accouting of bills.
Also, it’s not rocket science why vending machine operators want to change over to coins. It’s their pet industry. It means they can charge more and it’s more convenient for customers to use the new coins to pay higher prices. A 20 oz soda for $1.25 is 5 quarters… that is, 5 small fractions of a real unit of currency (the dollar) in the form of 5 physical coins. A 20 oz soda at $3 is 3 dollar coins, that is, 3 real pieces of a real unit of currency in the form of 3 physical coins, but perceived as 3 meaningless fractions of real currency.
Rep. Bill Huizenga, R-Mich., affirmed that Canadians have embraced their dollar coins. “I don’t know anyone who would go back to the $1 and $2 bills,” he said.
While I’m not averse to pointing out good things Canada has done, Canada has also done some stupid things, and what works for Canada doesn’t necessarily work for the US. The reason dollar coins fail in the US is because folks in the US view the split between dollar bills and coins as something that is substantive. Paper money carries value – it’s a note indicating its value (no matter how devalued it may be now). Coins are for fractional accounting.
Rep. Lacy Clay, D-Mo., said men don’t like carrying a bunch of coins around in their pocket or in their suits.
This will be one instance in the future where I’ll have to go back and cite myself as agreeing with a Democrat. I don’t know Clay’s other policies – they may well be abhorrent, but I’ll agree with the representative here. No one likes carrying coins. And no one wants to get change at McDonalds for a $5 bill in the form of a bigger pile of change. Coins are often inconvenient and obnoxious, and they don’t fit in wallets, and even folks who carry a change purse or pouch will get very sick of carrying around a pocketful of $1 coins.
Even bored D&D players who really liked to pay for things in gold coins when the Sacajawea dollar coins came out found the novelty wore off rather quickly. Not that I’m speaking from direct, personal experience.
And Rep. Carolyn Maloney, D-N.Y., said the $1 coins have proved too hard to distinguish from quarters.
And we’re back to Democrats being idiots. No, they aren’t hard to distinguish, unless you’re senile, handicapped, or a Democrat congresswoman. But they are obnoxious. Maloney goes on:
“If the people don’t want it and they don’t want to use it,” she said, “why in the world are we even talking about changing it?”
Hey, we said the same thing about Obamacare, the bailouts and Stimulus, and a dozen other issues and you didn’t listen! Can you figure this out, Maloney? NO MEANS NO!
“It’s really a matter of just getting used to it,” said Diehl, the former Mint director.
No, it’s not. We don’t want it, we don’t want to get used to it, we don’t like it, we don’t want or like your changes, leave us alone!
Rep. Steve Stivers, R-Ohio, said a penny costs more than 2 cents to make and a nickel costs more than 11 cents to make. Moving to multiplated steel for coins would save the government nearly $200 million a year, he said.
$200 million which out of a $1.6 trillion dollar deficit and a multi-trillion dollar budget will mean almost nothing, but will make things more difficult for the public, will give a physical indicator of the devaluation of the dollar, will piss off the public, and is only embraced by people who want to be more like the basketcase of Europe. Historically devaluation of currency was also done by mixing cheaper metals with issued coins. Maybe it’s more important to figure out why the coins are devalued first. Though if he’s just talking penny, nickel, dime, and quarters, and not talking about changing the $1 bill over to a $1 worthless obnoxious coin, I could see Stivers’ point.
A working man’s dollar cannot be changed into a coin.
And coins and strippers don’t mix.
Update: Looks like HotAir just got wind of this story. They point out there’s one company that gets all the bill paper contracts. Doesn’t change any of the practicality arguments against it, or the way it psychologically devalues currency by turning a full unit (the dollar) into a denomination that acts like a fractional unit (the coin); and how it enables higher prices for vending machine operators – who of course favor it.