Obama Adminstration's Plan To Change Metal In US Coins

Lets get rid of the dollar bill.
It costs about 7 cents each to print a dollar bill, which lasts on average about two years maximum.
The average coin costs about 20 cents or so and would last about 10-15 years.
How is THAT for a cost savings?

That happened to me at lunch the other day.

I think there are plenty of cents out there. Since 1983, there have been 269.3 Billion of those things minted (not including 2009). That is just about $10 each person in pennies. No, I do not foresee a shortage if we stopped minting them for a year, or even 5 years.

You also have to understand the thinking of the general public. Sure there are plenty of cents out there, in bottles and jars, boxes etc. But not in the actual streams of commerce. As a general rule the public will NOT bother taking them back to the banks. Then as the supplies in the banks start to dry up (because they will continue to go from the banks, to the people, to the hoards, shortages WILL occur. Businesses will start asking people to use exact change, eventually the banks and businesses will, for awhile, even offer to pay a premium over face value to get cents. Some people will then redeem their cents, but nowhere near enough. Other people will see the scarcity of the cents and the premiums offered as a reason to start hoarding them hoping for even higher premiums in the future. The net results is an even faster disappearance of the cents from commerce. Rather than continue to pay ever higher premiums to get cents the businesses will eventually begin rounding.

I know what I am talking about. I've seen this happen at least three times during my lifetime. ach time the only thing that stopped it was a greatly increased output of cents from the mint. And it doesn't take that long for the shortages to begin once coin production slows or stops. Why do you think they have to make billions of new cents every year and why are the normally the first new coins seen in circulation each year? It's be cause the Fed DOESN'T normally have that many in storage. To a very large extent the cent is a one way one time use coin, and if production stops shortages begin shortly thereafter.

I think changing the alloys would be the most likely thing to occur.

Eliminating the dollar bill and other bills, in short, will be disastrous for Massachusetts and other states that provide the paper, ink and technology to print banknotes. Currently, the $1 bill I think occupies 45-50% of the total pieces of banknotes issued in the United States, and because of its low value, it has to be reprinted... A LOT. So, if the one dollar bill is not issued anymore, that would destroy a large part of those local economies (like Crane Co, which is located in small Dalton, MA. No senator or congressperson would want that on their conscience.

Other countries that have changed their small "change" into coins can do that because their currency system is not dependent on a representative congress, but a central bank. Our federal reserve doesn't have the constitutional right to change our money, so that's why the congress has to deal with it. Whether or not that's a good idea, it'll have to depend who's for and against the fed and on what grounds.

Anyways, I think in 1 year or so we will be seeing steel coins. Although it would carve out a large part of the revenue from Jarden Zinc and other nickle/copper suppliers, at least it would help another American company.

One more thing... I think there's going to be some more opposition against eliminating the dollar bill because it's, at least the way I think, the most recognizable American currency other than the $100 bill. Do you know why the new series colored notes still have the old 19th century font and typography? I've read on the BEP site that the new notes have to remain "distinctly American." Perhaps that would still keep the dollar from being eliminated and more boring designs to keep coming our way.

As much as I would like to see polymer notes, I think the US wouldn't agree to it because the polymer is supplied by Australia and I think for every note we print, we would have to give the RBA and CSIRO some licensing fees or something of the like. c'mon DuPont! Just develop a currency polymer! And no, we don't want Tyvek anymore.

I see what your saying, Conder, and I tend to agree. I do not think, however, the mass hoarding would start that quickly, especially with the economy as deperessed as it is. Several friends of mine (the kind that normally just sits on their pennies) have cashed them in in recent years and I would imagine this exists everywhere.
Also, like a indicated above, I don't think the disappearance would be a bad thing. Let's face it, the cent is useless and it is a waste of time, money, and energy to continue coining them. Its time to axe Lincoln

WS1040, I think your line of thinking is flawed regarding MA and jobs. The discontinuing of the dollar bill would certainly hurt the paper and related fields but think of the rest of us - we have to pay for the (re)production of these dollars. Why should the taxpayer be forced to pay extra just to keep some government favored businesses' doors open? The Senator that works to eliminate the contracts pertaining to Dollar creation would have no such guilty conscience - he should be praised as a champion of the poorer classes!

But worry not, IF this were to happen, some company somewhere would get a nice juicy contract for the production of dollar blanks. They too would be overpaid and would be able to hire just as many workers as the paper company. And then, the process starts all over

--gary

My personal opinion is that it is only a matter of time before we move to the era of rounding up cash purchases to the nearest 5 cent anyway. Electronic purchases will continue to be calculated to the nearest cent. I think it's time to be proactive and begin the slow down/elimination of the cent (sad though it will be). The government could/should begin a campaign much like when they planned the conversion from analog to digital broadcast television. The fact remains that they are not going to preserve or change the status quo for the collectors. We already have programs from the mint to 'satisfy' our collecting (at least that's what they tell us...)
Do I think they will take the sensible approach? Probably not. Politics will be played, favors granted and the situation will drag on and mire down until it is killed again...or an "emergency measure" will be passed and we will have a new mess to pay for.
Thanks for letting me rant...