More on dollar coins and modernizing US currency

Here's my latest toy:

It's a Portsou coin holder. It is from a Canadian company... apparently US and Canadian coins are about the same size. It makes paying with exact change and using dollar coins very convenient. Here's a video of it in action.

I was able to get about $20 in Presidential dollar coins at the bank and so I filled up the top two slots with them. I've used them a few times so far and had no problems getting businesses to accept them. Since $20 won't last very long, I decided to order a box of $250 Thomas Jefferson dollar coins from the US mint. They have a special offer with no shipping charges to encourage more coins to be introduced into circulation.

I've talked about things which the US could learn from other countries before. Since then I learned about the Coin Coalition and Save the Greenback, two groups that lobby our federal government both for and against dollar coins. The Coin Coalition is mainly the vending machine industry, and Save the Greenback represents the Bureau of Engraving and Printing employees as well as paper and ink suppliers. I've also read that polls indicate that the public prefers dollar bills to coins. I suspect this is mainly due to ignorance. Most people have probably never seen the new dollar coins, and many think that "In God We Trust" was removed when it was really just moved to the edge. (The latest presidential dollar coins moved "In God We Trust" back to the front of the coin.)

Here's what I would like to see happen to modernize our currency:

1) discontinue the penny
2) stop printing the dollar bill
3) increase production of dollar coins
4) increase production of $2 bills

Doing #1 and #2 opens up space in cash registers to put dollar coins and $2 bills both of which exist and are underused. Eventually I think it would make sense to transition to $2 coins like the rest of the English speaking countries of the world have, but this would be an easy change to do now. Also, increased production of $2 bills might placate Save the Greenback somewhat. Getting rid of the penny will also open up space in pockets and purses for the dollar coin.

The Congressional Budget Office estimated in 2000 that switching from dollar bills to dollar coins would save about $500 million dollars a year due to the much longer lifespan of coins (30 years vs 18-22 months for bills). Getting rid of the penny would probably save some money as well. Printing more $2 bills could offset this somewhat, but that would be worthwhile to get us moving in the right direction. Perhaps after one successful bill to coin transition, the government would be more likely to see the benefit of a $2 coin.

If this transition ever happens, my Portsou will be fine because I can just put a stack of dimes where the pennies are today. This is how it is used in Canada. Also, if we ever create a $2 coin, hopefully it is just slightly larger than the current dollar coin in which case I could put it in the upper left slot where the Canadian $2 coin goes.