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Mar 11

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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?

About the author

Anand Khemlani

I am a founding member of Fulcrum Inquiry, an accounting and economic consulting firm that performs damage analysis for commercial litigation, forensic accountings, financial investigations, and business valuations. I am a Certified Public Accountant (CPA), Accredited in Business Valuation (ABV), a Certified Fraud Examiner (CFE) and am a licensed Real Estate Broker. I regularly serve as an expert witness involving results of my forensic accounting assignments and damage analyses. My resume is available on Fulcrum's website

Permanent link to this article: http://betweenthenumbers.net/2011/03/should-the-u-s-elimate-the-1-bill-and-save-5-5-billion/

4 comments

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  1. Daniel Nolte

    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.

    1. Lakawak

      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.

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    Perfect work!

  3. Arletta Abke

    I have to say I’m impressed. Very seldom do I come across a website that’s both educative and amusing. Just want to inform you that you have most definatly hit the nail on the head. Your idea is excellent. Thank you is all I really have to say !

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