Government Accountability Office Flips On Dollar Coin

ShadyDave

https://www.npr.org/2019/04/08/711162059/government-watchdog-flips-on-dollar-coin

Interesting article by NPR on the US Gov'ts stance on switching from using paper money to $1 coins to save money (or to waste less ).

"Analysts have long argued that the federal government could save money by making the switch because even though coins cost more to mint, they last much longer than paper money. In 2011, the Government Accountability Office estimated the savings at $5.5 billion over 30 years.

But a second look from the GAO flips that coin argument on its head. Analysts now say the government would lose between $611 million and $2.6 billion over 30 years by phasing out the dollar bill. The economics have shifted because dollar bills are lasting longer."

Looks like paper money is not being destroyed or needing to be replaced as often as it use to be, probably due to the increase in credit card use.

ms70

So the bottom line seems to be plastic is extending the paper dollar's longevity and so there's no longer a pressing need to switch to coins..... The plastic in effect is slowly phasing out both of them.

Interesting.....

ricko

Well now... that is an interesting development.... I do my best to contribute to dollar bill wear and tear by using them in commerce... However, I guess my effort in this little town in the mountains just is not enough Cheers, RickO

CaptHenway

Yes, as I said in my thread, cash is now obsolete. The life span of a dollar bill used to be under 18 months. At that point a dollar coin made sense.

Hemispherical

Attached is the GAO report. Short snippet.

What GAO Found

GAO's analysis found that replacing the $1 note with a $1 coin would likely result in a net loss to the government over 30 years. GAO found the government would incur a loss of about $611 million if notes were actively replaced and about $2.6 billion if $1 notes were replaced gradually (see figure). These simulations represent the first time GAO has found that replacing the $1 note with a $1 coin would result in a net loss to the government rather than a net benefit. GAO's estimates are based on current data and economic projections, which have changed over time. For example, the lifespan of the $1 note has more than doubled since a 2011 GAO analysis, from 3.3 years to 7.9 years, largely due to changes in note processing technology. Stakeholders generally identified few benefits from replacing $1 notes with $1 coins. Seven of 10 stakeholders GAO met with said that replacing the $1 note with a $1 coin would result in additional costs. For example, armored carriers told GAO that their transportation costs would increase because coins weigh more than notes.

https://www.gao.gov/mobile/products/GAO-19-300?utm_campaign=usgao_email&utm_content=daybook&utm_medium=email&utm_source=govdelivery

LindeDad

I don't read that all the wharhouses full of coins already made are taken into consideration.

JBK

As Artie Johnson used to say: "Veeery Interesting...."

I guess we're stuck with the dollar bill forever, and we can't blame it on Crane's any more.

3stars

Guess Canada, UK, Euro have it all wrong.

Some_of_it

And the did not consider replacing the dollar note with a dollar coin and a two dollar note. That would work.

kbbpll

“In both replacement scenarios, we assumed that the public would increase its holdings of cash when coins are used instead of notes and that the replacement ratio would be 1.5 coins for each note” - so, the estimated costs are dependent on a completely arbitrary assumption? I would like to see where they got this 1.5 figure from. Maybe in the short term, but nobody is going to hold onto 1.5 times more $1 coin than $1 paper for 30 years. (Quote is from a Coin Week article on the same subject)

privatecoin

The dollar coin by the "US" mint. The dollar bill by the "Un" Federal reserve....

jmski52

I rarely use plastic but even the hotel chains are herding us in that direction. They will lose my business.

SamByrd

The GAO has flawed logic. Canada has shown by not printing 1 dollar notes the public will adapt and use one dollar and even two dollar coins in commerce. The lower need for small bills even more so makes a sound argument for using coins and getting rid of the lower value bills. The fact there are perhaps 100's of millions of coin dollars already in vaults makes the economic argument even stronger to use dollars coins.

Cameonut

I have not believed much of what the goobermint tells us for the last 10 years.
Not buying the GAO argument either.

pocketpiececommems

Metal Detecting would be more fun if there were dollar coins instead of dollar bills