Infidelitas
December 2nd, 2012, 05:35 PM
KEVIN FREKING
December 2, 2012 11:14am
IT is the world's most iconic unit of currency. But the American $1 bill could be headed for the scrapheap.
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 US Mint has produced 2.4 billion Presidential $1 coins. Most are stored by the Federal Reserve, and production was suspended about a year ago.
Experts say that while it would be expensive to replace machines, the fact that coins can stay in circulation for up to 30 years, while paper bills only have four to five year lifespans, outweigh the initial costs.
"We've never bitten the bullet to remove the $1 bill as every other Western economy has done,’ said former director of the U.S. Mint Philip Diehl said. "If you did, it would have the same success the Canadians have had."
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.
Notes versus coins. The Americans may soon follow Australia in swapping dollar notes for coins.
The Mint is preparing a report for Congress showing how changes in the metal content of coins could save money.
The last time the government made major metallurgical changes in U.S. coins was nearly 50 years ago when Congress directed the Mint to remove silver from dimes and quarters and to reduce its content in half dollar coins.
Now, Congress is looking at new changes in response to rising prices for copper and nickel.
At a House subcommittee hearing the focus was on two approaches:
Moving to less expensive combinations of metals like steel, aluminum and zinc.
Gradually taking dollar bills out the economy and replacing them with coins.
The GAO's Lorelei St. James told the House Financial Services panel it would take several years for the benefits of switching from paper bills to dollar coins to catch up with the cost of making the change.
Equipment would have to be bought or overhauled and more coins would have to be produced upfront to replace bills as they are taken out of circulation.
But over the years, the savings would begin to accrue, she said, largely because a $1 coin could stay in circulation for 30 years while paper bills have to be replaced every four or five years on average.
"We continue to believe that replacing the note with a coin is likely to provide a financial benefit to the government,'' said St. James, who added that such a change would work only if the note was completely eliminated and the public educated about the benefits of the switch.
Even the $1 coin's most ardent supporters recognize that they haven't been popular. Philip Diehl, former director of the Mint, said there was a huge demand for the Sacagawea dollar coin when production began in 2001, but as time wore on, people stayed with what they knew best.
"We've never bitten the bullet to remove the $1 bill as every other Western economy has done,'' Diehl said. "If you did, it would have the same success the Canadians have had.''
Beverly Lepine, chief operating officer of the Royal Canadian Mint, said her country loves its "Loonie,'' the nickname for the $1 coin that includes an image of a loon on the back. The switch went over so well that the country also went to a $2 coin called the "Toonie.''
Australia switched to a $1 coin in 1984 and the $2 coin followed four years later.
The Mint's report, which is due in mid-December, will detail the results of nearly 18 months of work exploring a variety of new metal compositions and evaluating test coins for attributes as hardness, resistance to wear, availability of raw materials and costs.
http://tools.themercury.com.au/stories/53807074-world-news.php
December 2, 2012 11:14am
IT is the world's most iconic unit of currency. But the American $1 bill could be headed for the scrapheap.
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 US Mint has produced 2.4 billion Presidential $1 coins. Most are stored by the Federal Reserve, and production was suspended about a year ago.
Experts say that while it would be expensive to replace machines, the fact that coins can stay in circulation for up to 30 years, while paper bills only have four to five year lifespans, outweigh the initial costs.
"We've never bitten the bullet to remove the $1 bill as every other Western economy has done,’ said former director of the U.S. Mint Philip Diehl said. "If you did, it would have the same success the Canadians have had."
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.
Notes versus coins. The Americans may soon follow Australia in swapping dollar notes for coins.
The Mint is preparing a report for Congress showing how changes in the metal content of coins could save money.
The last time the government made major metallurgical changes in U.S. coins was nearly 50 years ago when Congress directed the Mint to remove silver from dimes and quarters and to reduce its content in half dollar coins.
Now, Congress is looking at new changes in response to rising prices for copper and nickel.
At a House subcommittee hearing the focus was on two approaches:
Moving to less expensive combinations of metals like steel, aluminum and zinc.
Gradually taking dollar bills out the economy and replacing them with coins.
The GAO's Lorelei St. James told the House Financial Services panel it would take several years for the benefits of switching from paper bills to dollar coins to catch up with the cost of making the change.
Equipment would have to be bought or overhauled and more coins would have to be produced upfront to replace bills as they are taken out of circulation.
But over the years, the savings would begin to accrue, she said, largely because a $1 coin could stay in circulation for 30 years while paper bills have to be replaced every four or five years on average.
"We continue to believe that replacing the note with a coin is likely to provide a financial benefit to the government,'' said St. James, who added that such a change would work only if the note was completely eliminated and the public educated about the benefits of the switch.
Even the $1 coin's most ardent supporters recognize that they haven't been popular. Philip Diehl, former director of the Mint, said there was a huge demand for the Sacagawea dollar coin when production began in 2001, but as time wore on, people stayed with what they knew best.
"We've never bitten the bullet to remove the $1 bill as every other Western economy has done,'' Diehl said. "If you did, it would have the same success the Canadians have had.''
Beverly Lepine, chief operating officer of the Royal Canadian Mint, said her country loves its "Loonie,'' the nickname for the $1 coin that includes an image of a loon on the back. The switch went over so well that the country also went to a $2 coin called the "Toonie.''
Australia switched to a $1 coin in 1984 and the $2 coin followed four years later.
The Mint's report, which is due in mid-December, will detail the results of nearly 18 months of work exploring a variety of new metal compositions and evaluating test coins for attributes as hardness, resistance to wear, availability of raw materials and costs.
http://tools.themercury.com.au/stories/53807074-world-news.php