Dollar Coins Still Not Catching On

The Detroit Free Press: Congress explores ditching $1 bills for $1 coins

About every year it seems, we get the story of the Mint pushes for the dollar bill to be replaced with the dollar coin. Just like last year, it doesn't seem to be catching on with the public or Congress.

While its true that switching from the dollar bills to the coins will save money - allegedly about $146 Million dollars per year according to the GAO and the Mint, people just prefer the one dollar note to the coins. (I do love how they stretch the time period to 30 years so they can claim it will allegedly save 4.4 Billion dollars).

Do note that the $146,000,000 in alleged savings is the equivalent to about 24 minutes of federal government spending this year (Total federal spending divided by minutes per year). If the committee took any longer than 24 minutes to discuss it, they were wasting more time than the issue was worth.

And, just as with the Susan B. Anthony and Sacagawea dollars, the President's series of Dollar coins that first were released in 2007 are still not catching on:

Americans spurn the $1 coins featuring images of U.S. presidents. About $1 billion worth of the coins sits in government vaults, unwanted.

The real interesting part is the claim this year that the dollar coin costs 13 cents to manufacture, while last year the cost was quoted as 30 cents.

Is this the case of some great new manufacturing efficiency or did someone get their facts wrong?

In any case, until there is a decision for a total withdrawal of Dollar Bills from circulation, don't expect the coins to catch on any time soon.

Dollar Coins, Dollar Coins Everywhere But No One Wants to Use Them

The Baltimore Sun: Dollar coins piling up at Baltimore reserve bank

a dimly lit underground vault a block from Camden Yards, the Federal Reserve is holding millions of dollars in cash that nobody wants.

The money — stored in cloth and plastic sacks piled high on metal shelving units — is in the unloved form of dollar coins, some of them never used. But a 2005 law requires the reserve bank to keep ordering coins regardless of its stockpile, and so vaults in Baltimore and around the country are filling up.

Americans just don't appreciate dollar coins, even if they do cost less to make and last longer, not to mention actually make the US Treasury profit.

The nonpartisan Government Accountability Office reported in March that switching from paper to metal would save taxpayers $5.5 billion over 30 years.
....
It costs 30 cents to make a $1 coin, but the Fed purchases it for face value — and the U.S. Treasury pockets the difference. In 2010, the Mint put about 400 million $1 coins into circulation, which means the government made a profit of about $280 million.

We prefer greenbacks to the coins as they're lighter to carry and more convenient, and the shiny golden coins slightly bigger than a quarter don't feel like dollars to people.

Until the government makes a law and ends production of the $1 banknotes,as occurred in Canada when the loonie was rolled out, you're going to see this problem continue as people choose not to use them. From the Susan B. Anthony, to the Sacajawea, and now we're looking at a surplus of Rutherford B. Hayes dollars as people stick to paper.

Beck, who has worked at the Baltimore branch for 27 years, would not say how many coins are stored in Baltimore, but the Fed's board of governors told Congress in June that the reserve system is holding more than $1.2 billion in dollar coins at 28 cash offices across the country.

Officials expect the number of dollar coins sitting in storage to grow to $2 billion by 2016.

I, for one, would certainly be willing to take some off their hands if space is a concern.

Heck, I'd even promise to carry and spend them, and thus further stimulate the economy rather than let them tarnish sitting in a vault.