Here's My Idea To Handle the Dollar situation

Darkslide820 · August 23, 2003 2:45PM

As you can probably tell by my sig, I like the new dollar coins very much and don't want them to go extinct. However, that is threatened by decreasing mintage figures every year since it began, as well as many punchlines on the nighttime talk shows. Since most people figure that they have the dollar bill and don't need the coin, that's another thing threatening it. Here's my ideas:
1) I've read in a number of places that if the dollar bill was removed, it would save the govt. $500 million a year.
2) I read in Coinage magazine that the $2 bill is being remade by the govt. So my idea is to take out the $1 bill and replace it with the $2 bill, and this would lead to more and more people using the dollar coin to bridge the gap between the Kennedy half and the Jefferson $2.
3) The $1 bill can be seen as wasteful in a way, because they spend $500 million a year making billlions of bills, which become unusable in about a year and a half. Plus, if the dollar bill was eliminated, the govt. saves more money, since they still have a lot of Sacagawea dollars saved up over the last few years, and thus don't have to spend money making too many more right away.

In the end, I figure that if they're going to make all these things, they should at least be used. I mean vending machines don't always take bills, but they're always up for coins. And when people say that dollar coins are too heavy, why don't they push for cent bills? I was in Canada 2 years ago, and people used dollar and $2 coins without question. I actually saw barely any bills there.

numonebuyer · August 23, 2003 2:49PM

If you want to get the dollar coin into circulation, you have got to get the vending machines to accept them. Not one machine where I work accepts the dollar coin.

Numonebuyer

ddink · August 23, 2003 3:05PM

I'll never use a dollar coin. I think most people fall into the "I hate to carry around change" category. For women it's a little easier since they can put the coins in their purse, but I don't want to have a bunch of coins jingling around in my pocket. Plus the fact that when I get up in the morning I only have to put two things in my pockets: keys and wallet. If you get rid of the dollar bill, then I'll have to keep track of (how many? half a dozen, a dozen?) a number of dollar coins as well. I don't think the $2 bill will ever circulate either.

Bottom line: if it ain't broke don't fix it. I think, at the very least, that's the mentality of a lot of people. Why don't we see more changes in coin designs? The status quo rules supreme due to the sheer force of its inertia. Sure, the government will make $500,000,000 more per year, but what is that when the federal budget is what, $2,000,000,000,000? Heck, there are a lot of programs that waste more than 500 million. Not to say it wouldn't be nice to save a chunk of change (although most of the 500 mil would doubtless find its way into a few politician's pockets--or pet projects), but I don't think we'll see the $1 bill go out of vogue any time soon. Remember the Susan B. Anthony dollar? Sure, people SAID they didn't use it because the couldn't tell it from a quarter, but I really think people are unwilling to use them, except in niche areas such as paying for tolls, etc.

Don't get me wrong--I actually like the Sac dollar. I just don't think we'll ever get a dollar coin to circulate. Then again, "ever" is a long time.

Darkhorse · August 23, 2003 3:09PM

Eliminate the 1¢ coin and start rounding up or down like in Australia, that'll ease up some weight in your pockets and make room for a dollar coin.

And eliminate the dollar bill too of course.

Baley · August 23, 2003 3:10PM

Just got back from Europe, they have the right idea with the 1 and 2 Euro coins and 5 and higher Euro bills, works fine once you get used to it, Ditto Canada and Australia, IMO its just a matter of time until the US falls in line, also while we're at it, lets mint the penny through 2009 and then just be done with the damned things, ok? Nothing would be better for copper collectors than ending the one cent coin.

mrcommem · August 23, 2003 3:15PM

The best way to get the dollar coin in circulation would be for the banks to use them. If the U. S Treasury would give the banks a 5% discount to distribute them, you could bet your last cent you would get them instead of paper when you cash your check. What does it cost the Mint to make a dollar coin? Something like 12 cents. The treasury could afford to absorb a nickel a dollar to get the banks to distribute the dollars.

itsnotjustme · August 23, 2003 3:30PM

It's a matter of inflation. Our smallest denomination coins has been the cent since the late 1850s. It buys so much less now than then. Are you concerned if you don't get the right number of cents in change? We have those give a penny take a penny things because their worth is so low.... these effectively allow customers to chose to round to the nearest nickel. So the cent should go.

Same logic applies to why the $1 note should go (although there were lower denom notes more recently).

When the two of these are gone, it makes room in cash registers for $1 coins and $2 notes.

Interesting thought on having the Fed distribute them at a discount.... would need to be first time out only, and they could not be returned. The no return could be a problem, as I think part of how they operate they need to take coinage back when banks want to return excesses. Maybe they could have a temporary no return... enought that it would not be worth while to hold then return 12 months later. And a smaller disount of 1-2% would likely be enough for banks.

Side note, I read about a proposed law encouraging military bases to distribute these. But we are trying to go to all electronic transfer of pay and TDY pay. Our finance offices don't handle much cash.

itsnotjustme · August 23, 2003 3:31PM

p.s. I have a few rolls in my car. I try to carry them in places where I make small cash purchases.... fast food, barber, etc.

numonebuyer · August 23, 2003 3:41PM

I have posted a similar response to similar questions before. It amazes me how my statement is often ignored and replaced with statements that say something about the banks using them. If there is a place to spend the dollar coins, then the banks will provide the dollar coins. Banks provide what the users want. Banks have no power to push anything on users.

Here is my story (I have told it before). I went to the post office and bought stamps at their stamp machine. I received a few dollar coins in change. I carried those worthless things around for months. If any vending machine I came across would take the things I would have spent them and put them back into circulation.

What really irritates me is that I know the golden dollars are the same metallically as the SBA (they had to be by law). This tells me that the vending machines would not take SBAs. Pretty odd considering how long ago those were made.

Numonebuyer

numonebuyer · August 23, 2003 3:44PM

Oh, by the way, I visited Vancouver a few years ago. It took me about 5 seconds to adapt to having no dollar bills and using the one dollar and two dollar coins they have in circulation. Oh, and by the way, my pants did not jingle. It seems that all the men in Canada carry a little change thing in their pants pockets that conveniently holds their change.

We need to get over this love affair with the dollar bill. Give me a break.

Numonebuyer

mrcommem · August 23, 2003 3:44PM

Banks are so cheap, I don't think they would have a problem pushing as many golden dollars out the door as possible just to rake in 5% each time they order more coins from the Fed. They sure wouldn't order any paper dollars if they can save 5% by ordering and distributing coins. The only stipulation would be that they could not return any golden dollars back to the Fed. I think banks could get rid of as many golden dollar if they convienently ran out of paper dollars!!!

cladking · August 23, 2003 10:51PM

Our currency system is quite broken because it is entirely obsolete. The only reason
it works at all is that most transaction are electronic, check or other non currency. Part
of the reason for this is that the currency is worth less that 10% of what it was when it
was concieved. Handling costs on the smaller coins greatly exceed their buying power!!!
Every time the government makes a cent it costs the American consumer and tax payer
a lot of money. Indeed, the only thing holding this cost down on a per coin basis is that
the cent has so little buying power or value that it is typically thrown away after only a few
transactions. Even a nickel now has so little value that its primary utility is to make change.

We're also wasting huge amounts of money printing one dollar bills. These notes no longer
even have the buying power to pay for parking or a newspaper or magazine. What is the
use of paper with so little purchasing power? Since machines which accept paper are so ex-
pensive to operate there are many lower cost products and services which aren't available
to people. What is the cost of this to the economy?

Machines haven't been converted to use the new dollar simply because it's not circulating
and the coin isn't circulating because the banks won't issue them. Many banks won't even
give them out when customers demand them! Why are customers going to demand the
coin if machines won't accept them and bank managers call the cops if you try to deposit
them? The banks should be forced to issue them. Simply give them an increasing percen-
tage of their order in coin and stop making the bills gradually. I feel confident when I leave
the house in the morning that I can get change almost anywhere for a $5 bill and see no
reason to carry singles. It would be nice to carry a few dollar coins instead of many quarters.

Yes, the actual use of a dollar coin would hurt me and greatly impact the states quarter pro-
gram. Every dollar coin that gets into circulation will displace between two and three of the
quarters. Mint and treasury stocks of quarters would soar to as many as eight or ten billion
coins. It could be several years until the drawdown is sufficient to make coins for circulation
again. In the mean time those sitting in storage won't be getting worn down and destroyed
so this supply will increase the availability of nice clad quarters in the future. It would especially
increase the supply of later dates in nice condition.

1jester · August 23, 2003 11:03PM

We don't need pennies in circulation. We could even do without nickels. We also don't need dollar bills. We should have $1 and $2 coins, at least. In Britain, they have 2 Pound coins, which are worth about $3.25 at the present exchange rate. What's wrong with larger denomination coins? Nothing. Inflation has taken such a huge toll since 1933 that it doesn't make sense to coin such small denominations.

numonebuyer · August 24, 2003 12:22AM

I agree with most of what cladking said. However, between commercial enterprise and the banking industry, the banking industry is more quickly changed. So, the first thing that has to change is the commercial enterprise sector. There must be a law that says vending machines must accept dollar coins. I really don't think too many people grasp how much business vending machines do a day. Once the vending machines are changed, there is a HUGE market for the dollar coins. Once there is a market for the dollar coins, people can start using the dollar coins. Once people start using the dollar coins, the banks will start dealing with them. The money kept in banks is due to supply and demand. As far as the dollar coin goes there is pleny of supply but zero demand. The reason there is zero demand is that there is no place to spend them.

Numonebuyer

CarlWohlforth · August 24, 2003 12:28AM

I agree with Darkslide820 %100. Doing what he suggests would save us hundreds of millions of dollars. Believe me we need that savings! That money could be used to help beef up our power distribution system, roads or schools. Every little bit helps.

Plus I like to use bills and recieve coins in change. I get to hoard change for a while then I deposit my coins in a seperate savings account.

khayse · August 24, 2003 12:59AM

Kill the cent.

Kill the dollar bill.

Problem solved. (and I'll take whichever of these I can get. That is you don't have to bundle
these two proposals because then you will just get twice the people fighting the combined
bill)

> I'll never use a dollar coin.
You will if you don't have a choice.

> Bottom line: if it ain't broke don't fix it.
It is broke if it costs us $500 Million a year.

> I received a few dollar coins in change. I carried those worthless things around for months. If any vending machine I came across
> would take the things I would have spent them and put them back into circulation.
I agree with you but...am I to understand that the only thing you buy for months on end comes out of vending machines?!?

I just don't think it's that hard to spend a Sac.

-KHayse

sumnom · August 24, 2003 1:20AM

The reason there is zero demand is that there is no place to spend them.

You can spend them at any business in the United States. I spend mine all over and have never once had anyone refuse to accept them.

anoldgoat · August 24, 2003 4:21AM

The problem here is that we try to replace a bill with a coin not much larger than a quarter AND machines won't take them. I was in Australia when they changed over to the dollar. They replaced the whole monitary series at once. They did have a period where you used both. Now if an American who had never seen this currency before can handle both then we should be able to.
Thirteen nations in europe did it. Dunno if there was a period of change over where they had both.
The Philippines did it, changed the size of the coins all at the same time and added a five peso coin and eliminated the one centavo (centimo). Did Canada do the same?
The American people will complain, thats our right, but i think the best way to go about it is all at once.
Buy the way i like the Sac.

numonebuyer · August 24, 2003 4:44AM

Let me beat my drum one more time. I use the vending machine example bacause the new vending machines take dollar bills. How about making them take dollar coins. Novel idea, huh? It just smacks of ignorance to go to the vending machine with a dollar coin to be turned away.

Now, of course I would use the coins for other things, but how often do you go to a sales counter and buy something that costs less than $5?

Numonebuyer

P.S. I wish someone in Congress would read this thread.

kamehameha00 · August 24, 2003 4:49AM

anoldgoat,canada still makes cents

ddink · August 24, 2003 5:21AM

This sounds much like the HDTV debate: for some time TV companies wouldn't release programs in HDTV because nobody would buy the sets, so what was the use? Nobody would buy HDTV sets because nobody was broadcasting any HDTV programming. Eventually TV companies were forced to telecast some HDTV programming and the empasse was broken.

I like the thing about the dollar being given at a discount to banks. That's a very clever notion. I do have a couple more observations though:

When the half cent was eliminated, the next largest denomination was only twice as valuable, so things worked out well. If there was a two-cent coin in circulation, the penny would have died ages ago. Nobody cares if taxes and prices are rounded up by a penny--people do care about them being rounded up by four cents though. The nickel is worth five times as much as the penny rather than twice as much. That's a big problem to overcome.

If we eliminate the dollar and compensate by making $2 bills, what's the point? If we want dollar coins to circulate, don't give people another option not to use them. Just nix the $2 bill too.

I like the post mentioning inflation. It's funny to think just how valuable pocket change really was back then. Frankly, in 20-40 years we stand a very good chance of going completely cash-less. I can go the gas station now and take my keys out of my car, wave my keychain within a few inches of a flat sensor on the gas pump, then put my keys back in my pocket and pump my gas. I don't even have to go the "trouble" of removing my wallet, removing my credit card, inserting my credit card, removing my credit card, returning my card to my wallet, and returning my wallet to my pocket. I just swing the keys buy and the computer chips do the rest. With this technology in grocery stores and the like, why have cash? Can you imagine if every product had a tiny computer chip and when you left the store a modified version of the "sensormatic" technology automatically tallied the price of all your groceries and then scanned the chip in your keychain, in your pocket (or purse) and deducted that amount from your bill? It won't happen right away, but eventually it may.

Finally: why? We are coin collectors and are supposed to like coins. But what motivation does a congressman or senator have to pass such legislation. It saves a little (considering the size of the federal budget) money every year. It would save a little money every year if the dang city didn't keep building a median my subdivision, then removing in, then rebuilding it. Three months out of the year there's a median, three months there isn't, and six months they spend taking it out or putting it back in. There are a lot of ways to save money without a congressman or senator running the risk of making his/her constituency "uncomfortable."

<< <i>You will if you don't have a choice. >>

Everyone has a choice. I pay for everything with my debit card. Those who don't may quickly begin doing so if changes are made. But the biggest use of "choice" is when it comes time for the fall elections. When you reach into people's pockets and change things dramatically, people get nervous and resist. My great-grandmother still won't get on a plane. Some people don't change. Then again, some people do. As for saving $500,000,000, I can think of dozens of ways to do that, but since coins are the sine qua non of this thread, I'll save the political grandstanding

As for doing it all at once rather than gradually, I'm all for that. How long have they been trying to get us to switch to the metric system?

Baley · August 24, 2003 6:47AM

people do care about them being rounded up by four cents though

I think in that case, it would be rounded DOWN by one cent, dont you?

1jester · August 24, 2003 9:23AM

No matter how technologically advanced society becomes, there will always be a need for cash, because there are too many people who don't want their money transactions to be traced.

ddink · August 24, 2003 9:59AM

<< <i>I think in that case, it would be rounded DOWN by one cent, dont you? >>

Knowing our government? No I don't. The tax man cometh...

kranky · August 24, 2003 1:12PM

The dollar bill has to go away before the dollar coin has a chance.

Unfortunately, since the only company that makes the paper for US currency (Crane) is in Ted Kennedy's state, there is no chance of the dollar bill going away along with all the jobs at the paper company.

numonebuyer · August 24, 2003 1:23PM

<< <i>Unfortunately, since the only company that makes the paper for US currency (Crane) is in Ted Kennedy's state, there is no chance of the dollar bill going away along with all the jobs at the paper company. >>

I do agree in part. However, the paper used for the dollar bill is the same paper used in all of the other bills. I saw a show on this on TV. It seemed to me that there would not be a lot of savings seen in obtaining the paper if demand went down. It is really a very complex process to create that paper.

Numonebuyer

Askari · August 25, 2003 12:54AM

Actually, there is another option for saving money printing paper $1 -- print them out of plastic. A number of countries already do this because they're much more durable and harder to counterfeit. Sure, that wouldn't help those who want $1 coins to circulate, but it would probably be more to the general public's liking.

I think there are two primary problems facing acceptance of dollar coins by the American public. First and foremost is the opposition by the vending machine industry. When traveling and I want to buy a coke or snack at a vending machine, it almost always costs at least a dollar (especially in the DC area) and I don't like having to carry the equivalent of a roll of quarters with me. Many machines still will take only coins, not bills, and those that do take paper ... well, sometimes they do and often they don't.

The second major problem is the designs. The SBA was never accepted because it was downright ugly and too easy to confuse with a quarter. The public likes the look of the Sac ... until it's been handled a few times and turns "dirty." (Why? Because the Mint declined to use a European alloy that actually retains its golden color in circulation far, far longer.)

ddink · August 25, 2003 1:00AM

I've heard of making bills with plastic threads like that and it sounds pretty cool. One thing I realized that may be skewing opinion just a bit:

We are not *losing* $500 million a year making dollars. In fact, the BEP makes a substantial profit off dollar bills since they only cost a few cents to make. What I believe the originator of this thread meant is that we would make $500 million MORE than we presently do if we used only dollar coins rather than dollar bills, since the coins last longer. I don't know if it's the proper term, but that's what I call "opportunity cost." Kind of like having a $20,000 coin and needing a new car. The opportunity cost of the coin gets so high that you eventually sell it to buy the new car, since it "costs" you $20,000 in "lost" funds to hold the coin.

DrWho · August 25, 2003 2:15AM

Screw the banks. Why give THEM a 5% enticement. Give ME the 5%, and I'll use the coins. The banks make enough damn money.

keets · August 25, 2003 2:37AM

hey all

i guess i'm the exception to the rule when it comes to dollar coins. i use them daily. in fact, there are about 15 mixed in my pcket now and i'm on my way to the laundramat and Post Office where they'll get spent. i get them from the vending machines at work and routinely cash in $20's for the coins.

it just makes sense to have them all the way around. there isn't really a legitimate arguement against dollar coins that can't be dismissed as so much BS. Americans just have enjoyed freedom for so long and to such an extent that they whine/moan/bi#ch/complain about any kind of a change.

i wonder what it was like when currency started to be pushed in earnest for exactly the same reasons that are raised here, but maybe reversed. it eventually came to be accepted. if our Uncle just stops making dollar bills, issues a $2 bill and makes dollar or larger coins, three things will happen in succession:

1. everyone will whine/moan/bi#ch/complain about it.
2. everyone will start to use the available money.
3. everyone will come to accept it and the issue will be forgotten, guaran-damn-teed!!

al h.

Darkslide820 · August 25, 2003 3:45AM

First off, thanks to all for making this an interesting thread, and for those who either agreed with me, and the guy that said this thread should be read by a congressman.

When I said that figure about $500 million, it was from an article I read in Coinage magazine that said basically this: In phone polls, a vast majority of people said they would rather use $1 bills than $1 coins; but when told elimination of the $1 bill would save the govt. $500 million a year, the majority said yes to the coin.

I bring up my option of trading the $1 bill for the $2 bill and $1 coin because all 3 are being made anyway. The only way for the 2 latter to survive is to get rid of the 1 bill. Another plus of using the Sac/Jefferson combo is that there are so many of them already made, that not too much money would have to be invested into producing more - at least for now. Mintage figures of the Sac coin has gone from hundreds of millions, to tens of millions, to 3 million, to none this year. Obviously there's enough left. Also, this may even lead to more Kennedy halves being used, and, same as above, there's enough left to last a while.

hookooekoo · August 25, 2003 3:46AM

No need to bring the $2 bill into this, the only thing needed to get the dollar coin to circulate is for government to quit producing dollar bills.

sumnom · August 25, 2003 4:50AM

how often do you go to a sales counter and buy something that costs less than $5?

I do everyday. I buy coffee, newspapers, I ride the bus, I buy ink for my pen, snacks, maybe a used book, magazines, etc, etc.

Here's My Idea To Handle the Dollar situation

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