Wednesday, November 24, 2010

Dump the dollar bill?

"Coin of the realm"


Michael McGough

November 23rd, 2010

Los Angeles Times

At a time when consumers pay for candy bars and cigarettes with debit cards, it might seem quaint to debate whether the dollar bill should be retired from U.S. currency. Yet debate there is, stimulated by the release of a commemorative Abraham Lincoln dollar coin on the 147th anniversary of the Gettysburg Address.

Like previous coins honoring Dwight D. Eisenhower, Susan B. Anthony and Sacagawea, the new Lincoln dollar is likely to be handled mostly by numismatists. That might change if the dollar bill were abolished. Proponents of replacing the bill with the coin note that it costs about 16 cents to make a $1 coin, which lasts for 30 years. A $1 bill costs 7 cents to produce but lasts for 21 months.

Do the math, and the coin is obviously a better investment for the Treasury (not to mention an acknowledgment of years of inflation). Vending machines that now process $1 bills could be retrofitted to take $2 bills instead, which would become familiar in places other than racetracks. And the $2-for-$1 switch wouldn't require a new tray in cash registers.

Finally, dollar coins offer ample opportunities to commemorate political figures whose supporters have demanded that they be memorialized on paper money. For example, there is a move afoot among devotees of Ronald Reagan to quickly substitute his visage for Ulysses S. Grant on the $50 bill. Far better would be an early striking of the Reagan dollar that will be part of a collection featuring all of the presidents. At present that coin isn't scheduled until sometime after 2016.

Reagan, who disliked excessive spending, probably would prefer the dollar coin anyway.

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