Wednesday, April 27, 2005

Yet another lamebrained scheme to introduce dollar coins to America

Government hopes we'd flip for new dollar coins

WASHINGTON -- American pockets could one day jingle with dollar coins engraved with the faces of presidents from George Washington to Bill Clinton if a plan to mint presidential dollars gets the OK.

Hoping to cash in on the popularity of the state quarter program -- which has generated $5 billion in revenue -- the House of Representatives began debate Tuesday on legislation that could turn the golden dollar coin into a hot collectable.

The coins would be minted at a rate of four presidents a year, starting with George Washington and working up to the modern day. Every former president, living and deceased, would be on a dollar coin if the bill becomes law.
So we'd have to put up with Ronald Reagan quarters? Ewwwwww. (I'm sure the conservative side of the nation would be equally loath to put up with Bill Clinton coins, too.)
Supporters hope the new twist will drive up demand for dollar coins. "That coin needs some sort of boost to do better," said Rep. Michael Castle (R-Del.), who sponsored both the state quarter and the presidential dollar legislation. "The question is, will there be enough demand for a young person to walk into McDonald's and tell the cashier, 'I want a $1 coin in change'"?
Well, pardon me for stating the obvious, but the way to create "demand" for dollar coins is to stop printing dollar bills. That's all it would take. Simply pass a law that says, starting at the beginning of next month, dollar bills will no longer be printed. I completely fail to see why Congress insists on waiting for a market-based solution to this issue when it's obvious it's never going to happen.
Because coins are more durable than bills, the government could save as much as $500 million a year on printing costs if the public embraced the dollar coin.
I imagine even more money could be saved if they stuck with one design, rather than the 40-odd designs they'd get with this ridiculous plan.
The golden dollar debuted in 1998, featuring Sacagawea, the young Shoshone Indian interpreter who guided the Lewis and Clark expedition. But the golden dollar has yet to come into widespread use.
This is because dollar bills are still widely available. As I've said.
Castle's bill also includes plans for a penny series in 2009 featuring images from the life of Abraham Lincoln and a series of collectable coins stamped with the images of the first ladies. The mint is also rolling out a series of commemorative nickel designs, celebrating the Lewis and Clark expedition.
Okay, now here's where things get really bizarre. A penny series?!?!?!?! What???? Pennies are so worthless they practically qualify as litter. In fact, the United States Mint already spends almost a whole cent minting each penny. Their primary proponent is an absurd organization calling itself "Americans for Common Cents," which is merely a lobbying organization for the zinc industry, specializing in coming up with bullshit polls to make it look like pennies are supported by a majority of Americans.
"We've really seen a coin renaissance in the past few years," said Henrietta Holsman Fore, director of the U.S. Mint. Coins tell the story of our nation. They help us reconnect with our history."
This is bullshit. The real story here is that the United States Mint makes a profit on each coin it strikes, including pennies. If we go to a system that results in fewer overall coins, the Mint makes less money. It's that simple.
The dollar coin legislation is expected to win easy approval, but to get to the floor, Castle had to persuade North Dakota, which had no interest in seeing one of its most famous residents, Sacagawea, booted off the dollar coin. The compromise calls for Sacagawea dollars to be minted side by side with the presidential coins -- and for the presidential coins to wait until after the Lewis and Clark celebration ends in 2008.
Let me be clear. I strongly support the immediate elimination of pennies and dollar bills, with the aim of moving towards dollar coins. I also think it might be a good idea to introduce two-dollar coins, and possibly to eliminate nickels. The goal of all this is to make our money system more efficient.

The two primary inefficiencies in the current system are pennies and dollar bills, and the issue with both of these is that they are not worth the effort it takes to process them, compared to the alternative. Pennies are simply a waste of time, a waste of perfectly good metal, and possibly a significant environmental pollutant, given that people generally don't even bother picking them up off the ground anymore. Dollar bills are a problem because the American dollar is no longer valuable enough to justify having a paper bill to represent it. This point is not at all obvious--in fact, it never occurred to me until I spent some time in Canada and Australia, two countries which have both eliminated one dollar bills. At first, I thought it was really bizarre, not having a one dollar denomination, but after a day or so in Canada, I realized how nice it was to not have the fucking things clogging up my wallet. Even better, both Canada and Australia also have two dollar coins, which means a smaller total number of coins jangling around in my pocket. Think of it--how much effort do you have to go through in order to prevent your wallet from getting literally clogged with one dollar bills? If I get lazy about it, it's not unusual for me to end up with fifteen or twenty of the damn things, sometimes even more. In order to prevent this, I have to go through the effort of getting rid of them on a regular basis, typically with just about every cash transaction I make. This is really tiresome.

The basic problem is that inflation has finally brought us to the point where you really can't buy anything significant for a dollar. Depending on what measure you use, a 2003 dollar is worth anywhere between 3.5 cents and 17 cents in 1953 dollars. Even just going back twenty years, to 1983, gives a value of 32 to 62 cents. This means a dollar pretty much counts as "change" rather than as real money. Using a coin instead of a bill just makes more sense.


At 10:29 AM, Blogger Richard said...

Everything you've said makes sense, cke. Probably, too much sense for some - eh? ;^)

At 10:33 AM, Anonymous Didius Falco said...

Here in Oz, we have 1$ and 2$ coins, with the first plastic (yep, they're plastic, not paper) bill starting at the 5$ note.

In addition, we do not have a 1 cent coin. Our smallest value coin is the 5 cent piece. Weirdly enough, we still have odd-cents prices - I'd guess that marketing-types are loath to give up that .99 trick we're all so familar with. Still, they just round it up or down to the nearest nickel at the register...

Now I'm wondering where the rounding point is....but I'd be willing to bet 9.99$ that it favors the merchants. ;^)

At 11:00 AM, Blogger cke said...

When I was in Oz last year, I noticed that a lot of retailers would print the amount of rounding right on the receipt. I thought this was a helpful little practice. And it was very, very nice not having to mess around with one-cent pieces--even those little five-cent pieces were kind of a bother, actually.

And I like the Australian two-dollar coins: they're very compact, so you can have a lot of them without taking up a lot of space. On the other hand, the Canadian two-dollar coin is just plain cool--I'd be half tempted to move to Canada just for the Toonies. ;)


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