Should the U.S. Eliminate the $1 Bill and Save $5.5 Billion?

Some in Washington are focussed on what can be done to reduce the U.S. government’s budget.  Earlier this month, the U.S. Government Accountability Office issued a formal proposal to the Treasury and Federal Reserve to eliminate the $1 bill and replace it with the $1 coin.  The GAO estimates that the elimination of the $1 bill will save the country $5.5 billion during the next 30 years.  The reason is that dollar bills have a shorter life than dollar coins, as bills tend to wear faster and need to be replaced more often.

The proposal indicates that the transition would take 4 years.  During this transition, the government would have to invest in producing new coins.  After the transition, the government would save approximately $522 million each year.  When given a choice, Americans prefer the dollar bills over dollar coins. 

This proposal begs the question; how many other government expenditures can be reduced by simple changes?

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  1. This will only work if the Treasury ‘cuts the cord’ and forces the greenback out of circulation. Prior attempts at a modern dollar coin (the Susan B Anthony and the Sacagawea and the current presidential series) have run up against the wall of inertia that is old habits. All you have to do is look at the current fuss over old style incandescent light bulbs to see how stubborn people can be even to beneficial changes.

    Canda dropped their paper one dollar bills for the ‘Loonie’ dollar coin in 1989 and then did the same with the ‘Toonie’ taking the place of the two dollar bill in 1996. I’ve never missed having one dollar bills when in Canada. There isn’t any particular advantage to having the smallest paper money be a dollar.

      • Lakawak on April 24, 2011 at 12:30 AM
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      There absolutely IS an advantage to having paper bills over coins. Coins are bulky. And most people don’t want crap jingling around in their pockets, ESPECIALLY these days when they have expensive phones that can get scratched.

    • buy tramadol on April 16, 2011 at 10:15 AM
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    • Arletta Abke on August 25, 2011 at 3:08 PM
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