Dollars and dollars

[Figleaf]

I admit that I am easily bored by non-substantive discussions and sound-bites, so I found this informed comment on the weighty round dollar question a good change. I suspect it was planted by a frustrated government employee who was forbidden to make a good case for coins lest it would ruffle lobbyist feathers, as the data are a bit too good. Also, this is clearly a cut-and-paste job. Runnergurl didn't notice she/he/it had run out of space, but hey, just because the government says so it's not necessarily wrong

There are a number of reasons why you should ask for the $1 coin instead of the $1 note:

1. Elimination of the $1 note would save the US government up to $500 million per year (Government Accountability Office Report, 2002).
2. Coins are also more sanitary than notes & harbor fewer germs. Studies show that 94% of all $1 notes carry germs that could cause serious infections. Copper (the main alloy in $1 coins) is a bactericide, which means it can kill microbes as the coin is passed from one person to the next.
3. It is much more expensive for businesses to sort & count notes than coins.
4. The cost to process one thousand dollars worth of $1 notes at transit agencies is approximately $10.11. The cost to process the same amount in coins is $1.22. The reason for the large difference is that handling paper currency is more labor-intensive. Coin processing is more efficient due to the higher degree of technology & availability of counting machines. $1 coins are more difficult to counterfeit.
5. $1 coins costs 30 cents per thousand pieces to process at Federal Reserve Banks versus 75 cents per thousand pieces for $1 notes. There is no technology that will fully process paper currency and meet the Federal Reserve's acceptance requirements that all paper currency be faced when stacked, meaning all $1 notes must be stacked with the portrait of Washington facing the same direction. Therefore, note processors must stack and face all notes by hand.
6. The $1 coin is completely recycled into the production process after leaving circulation, whereas 90% of the dollar note is placed in landfills after leaving circulation, reducing the amount of usable land space and creating pollution to the air & waterways by increasing CO2 and H2S gas in the atmosphere.
7. Visually impaired shoppers frequently rely on store clerks to help them differentiate between notes. 1/2 of all US currency is $1 notes, so half of the problem would be solved by eliminating the $1 note and using $1

And hereby hangs the tale

Source: 13WHAM.com

[a3v1]

Anyway, point #2 makes a lot of sense.
The same argument has been used to reject appeals for replacing the 1 € and 2 € coins by banknotes.
Paper is an organic material on which all sorts of bacteria can thrive.

An argument I am missing is that coins are more economic by far over low-value banknotes because the life span of coins is counted in decades of years while the life span of low value banknotes is counted in months.
Regards,
a3v1

[Figleaf]

Two quotes from the article commented on:

Straight from the Bureau of Engraving and Printing, the "up to date" (because these numbers do fluctuate) life span of your paper money.

$1	21 months.
$5	16 months.
$10	18 months.
$20	2 years.
$50	4 years, 7 months
$100	7 years, 5 months.

and

Spokesman Michael White of the U.S. Mint explained to me that a little more than 1 billion of the new Presidential Dollar Coins went into circulation since the start of 2007.  At the cost of roughly 20 cents per coin, and an expected "circulation life" of about 30 years, that's a solid payoff so to speak.

Claudia Dickens over at the US Treasury's Bureau of Engraving & Printing was also helpful in explaining to me that the $1 bill costs 4 cents to make

With these figures, you can calculate that the break-even life span of a banknote in the US is exactly 6 years: over a period of 6 years it will cost as much to make one coin (20 cents) or 5 banknotes (5 * 4 cents) with a total lifespan of 30 years. That in turn means that if these figures are correct (their source is the best you can get, it seems to me), all US banknotes except the $100 note should be replaced by coins for optimal savings. However, I suspect the the total savings (they depend on the numbers of bills in circulation on average during the coming 30-years period)) will not be enough to buy one jet fighter.

What strikes me is that the case for replacing the 5 and 10 dollar bills (and introducing a $2 coin) is even stronger than that for replacing the 1 dollar bill...

Peter

[chrisild]

That in turn means that if these figures are correct (their source is the best you can get, it seems to me), all US banknotes except the $100 note should be replaced by coins for optimal savings.

Apart from the jet fighter cost argument there is also the aspect of portability. If the US replaced all its notes by coins, hardly anybody outside the US (and neighboring areas maybe) would accept US dollars.

As for the lifetime of a note, that seems to vary. In Aug-2003 for example, it was 15 months for a $5 note, 18 months for both the $1 and $10 notes, and 2 years for the $20 note.

For euro notes, it's 1.2 years for the €5 and €10, 1.4 yrs for the €20, and 3.3 yrs for the €50 note. At least that is the reply from the ECB that a euro tracker got a few months ago ...

Christian

[Figleaf]

If the US replaced all its notes by coins, hardly anybody outside the US (and neighboring areas maybe) would accept US dollars.

That would be an added advantage. Dollar bills are the denomination of choice of all kinds of criminals and dictators. Bona fide investors and traders use electronics to transfer money. When I'm in the US for a short stay (two days or so) I don't even change money, but pay everything by debit card. I have seen US visitors do the same in the euro area.

Peter

[chrisild]

Reminds me of that leader of some security council in Norway, Rasmus Woxholt, who seriously suggested in 2005 that notes should basically be replaced "with large, heavy coins. He explicitly said that he aims at making it "as impractical and elaborate as possible to pay by cash" ... http://www.aftenposten.no/english/local/article1103567.ece

Frankly, I very much appreciate the option of using plastic - and when I travel to the US, I just have a few dollar notes with me, for a tip, a taxi or shuttle bus maybe. Most other payments I use a card for when I'm there. But forcing people to make traceable purchases/payments only is a policy that I do not support.

Christian