After watching this ABC News story about how the Treasury has come to its senses and stopped minting dollar coins no one wants, I had to ask this question: Why did ABC come to the wrong conclusion about these coins?
On more than one occasion I have posted about how the government has gotten it wrong when dealing with the dollar coin. I've posted about it three separate times this year alone.
The problem isn't that the Treasury is making coins no one wants. It's that it's still printing dollar bills that last for a small fraction of the time that a coins lasts. The cost to print a bill is half that of minting a coin. A dollar bill lasts between a year and a half and two years. A coin lasts between 25 and 30 years. In the long run the coins costs less. But as long as the government keeps the dollar bill, no one will want or use the dollar coin...except maybe for commuters on certain public transit systems. (The 'T' in Boston uses dollar coins as change in its “Charlie Card” dispensers.)
The US taxpayer could save billions of dollars by getting rid of the dollar bill and switching to the dollar coin. But no one seems willing to make the switch, particularly when the vending machine companies start bitching about how reconfiguring their machines to accept the dollar coin will be expense. But expensive to whom, even if the claim is true? Why should the taxpayer subsidize that particular industry (for that's what it is if we stay with the dollar bill)? When Canada switched to Loonie (their dollar coin) and the UK switched to the pound coin, the vending machine companies did not fail. (Of course this part of the story is but a small part of the non-decision to stay with the bill.) All it takes is for someone in government to finally step up and say “Sorry folks, but it's costing everyone too much to keep printing this small denomination so we're switching over the the coin.”
Oh, there will be the typical hew and cry by those who just don't like change of any kind (no pun intended). But eventually they'll use them just like everyone else.
The time to retire the dollar bill is long overdue.
