Common Cents: I Cannot Tell a Lie: It’s Time to Get Rid of the Dollar Bill.

By Chris Miller.

In an age where the government deficit has reached new highs, it would be in our national interest if the government stopped production of the dollar bill.  Why?  Because $1 coins are much more cost effective than the dollar bill.

Dollar bills are made up of mostly cotton.  As cotton prices have risen in recent years, the cost of producing a dollar bill has risen to approximately six cents per bill and is expected to rise in the future.  Most wear out and are shredded after three years.  The dollar coin, on the other hand, costs about $.31 to produce and can last up to thirty years in circulation.  According to the Government Accountability Office, the government could save up to $5.5 billion in thirty years by eliminating the dollar bill and switching to the dollar coin.

There are currently over a billion dollar coins already sitting in government warehouses.  The EU, Japan, Britain, and Canada, all have higher value common circulating coins than the US dollar.  When Canada switched out its $1 bill for the one dollar coin or “loonie” in the 1980s, the Canadian government saved far more than its initial estimates.  Also, inflation and prices remained steady, suggesting that such a switch would not have any major negative impact on the economy.  A recent poll by Rasmussen Reports suggests that about 60% of Americans support a switch to the dollar coin, when informed of the savings.  Also, many vending machines and toll booths now accept dollar coins, so there would not need to be massive upgrading.  The frustration of dealing with a vending machine that won’t take an old, crumpled single will be a thing of the past.  Also stopping wasteful government spending such as the dollar bill, I think is something we can all agree on, even George Washington.