Plans to end the dollar bill is being pushed

Yes, read the GAO report. But actually *read* it; don't just look at the title and the summary. That report is where I got the information in my previous post: that the only reason the $1 coin "saves" money is that the GAO included seigniorage in its calculations--even though the Treasury and Fed both object to such accounting in their comments at the end of the report, and the report itself acknowledges that the CBO doesn't count seigniorage either!

The GAO report considered this option (see pages 14-15). It makes the "savings" less, because it results in less seigniorage, because fewer $1 coins are issued.

See pages 11 and 12 of the GAO report, where they note that both Canada and the UK found that, in order to replace a coin by a bill, they needed substantially more coins than bills--because coins "circulate with less frequency than notes". Some other countries needed as many as 4 coins for every 1 note removed from circulation!

By the way, a chart on pages 7-8 of the GAO report lists a whole bunch of countries that have replaced low-value notes by coins. If you look at that chart, one thing stands out: nearly all of those replacements took place in the 1980s, with very few happening more recently. There's a reason for this pattern: Since the '80s, the prices of base metals have increased greatly (so that coins aren't as cheap to mint as they used to be), while the lifespan of banknotes has also increased due to improvements in automated processing (so that notes aren't as expensive to replace as they used to be). If the U.S. had switched to a $1 coin in the '80s or even '90s, then there *would* have been substantial cost savings, as the reduction in the ongoing cost of maintaining a sufficient supply of $1-denomination-objects in circulation would have more than paid for the up-front cost of minting billions of $1 coins. But today, that's no longer the case. There's no economic justification for making the switch *now*, even though it would have been a good idea twenty years ago.

The Fed and the Treasury are separate entities, but they're both part of the U.S. government; the Fed is not "privately held". By law, the Fed's annual operating profit is transferred into the U.S. Treasury as "miscellaneous receipts". Therefore, for purposes of the present anaylsis, we can ignore the distinction between the Fed and the Treasury, since the profit from issuing currency and the profit from issuing coins both wind up in the Treasury eventually (though by different routes).

 

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It has to be considered because it seems to be of extreme importance to those who desperately want to keep the dollar note. Those who see the advantage of dropping the dollar note already know how they will handle it if they happen to find themselves in a strip club. They will give these girls the raise that has been denied them for the past 30 years and tuck a two. Dollar advocates, who apparently must frequent these establishments frequently, seem to be overly concerned with having to suffer the disaster of having to pay a little more for their entertainment.

 

It's funny you should say that about seatbelts. That is exactly the way I feel about them. I don't really care if lives were saved as a result, because this is only the reason touted to cover the real reason: revenue increase. I've respectfully debated with several members of law enforcement on the issue, and successfully defended myself in court against citations for not wearing them twice in the past. but I digress on that....

As far as eliminating cents and nickels, blasphemy! On the CT facebook page, I answered that question like this:

"An emphatic NO! It's just an excuse to get the public to willingly concede a 1-4 cent raise in the price of EVERYTHING. Think of everything you buy, not just limited to the 'overall' total at the grocery store, either. Every individual item's price will be raised. If you do not like to "cart around pennies" throw them in the little jar my the till. Don't whine about heavy pockets and end up costing the nation 1 to 4 % more for everything. Then you'd have to whine about inflation even more"

It's funny that the same people claiming pennies "weigh them down" are so quick to say how much a dollar coin.... will not.
Elimination is way too extreme. Redesigns are overdue anyway, why not find other materials for those coins?

I fear the day "cost effectiveness" trumps all and we are legislated into money becoming obsolete, giving way to 'credits' on 'cards' and enabling tracking of everything we buy by banks and govt. "Demolition Man" anyone?

 

I like extremism.

It's so predictable.

 

Source? I find it VERY hard to believe that 10% of british 1 pound coins are fakes.

 

They'd like 5's and 10's even more.

WHo knows what they'd do for a 20?

In reality, this is another lame argument put up as a road block to kepp the rag buck around. Unless of course, coin collectors and numismatists dominate the adult entertainment arena? Whatever.

I expect that these darlings of the dancing stage turn their bills in at the end of the evening for something a bit more easy to carry home. Namely, 20's. The one dollar bills are more than likely recycled by the business owner for those customers that just came in from the ATM machine for a night of excitment.

 

At least it would do away with the lame "Where's George" mystery game. Maybe I was a little bitter since I saw a real nice binary repeater with the Where's George stamp. They'll just have to counterstamp the prez dollars with the same thing.

 

Hmmm?

Does this - http://en.wikipedia.org/wiki/Superdollar - keep you from accepting $100 bills? Even those that pass the pen test?

It;s interesting that the third dreamed up roadblock to the dollar coin turns to the possibility that they'd be counterfeited and what the cost would be to address this issue.

The Sacagawea is already counterfeited.
The Eisenhower Dollar is already counterfeited.
Jefferson Nickels have been counterfeited.
I've seen counterfeit $10 bills.
$20 bills are counterfeited quite frequently and as shown bvy the above link for the SuperDollar, $100 bills have been counterfeoted by foreign governments to the point where they are nearly undetectable even by the experts.

The whole point being that regardless of what medium is used for daily cash transactions, there's always going to be someone out there making their own.

 

No. And I don't really care.

 

Please, share how you beat these two charges. I'm curious since the law is fairly straight forward. You either have your seatbelt on and the officer "thought" otherwise or you were not wearing your seatbelt in bltatant disregard for the law? Did you beat them because you convinced the judge that "you" could prove that you had no need for them? Did you beat them because perhaps the ticketing officer didn't show up for court? Please share.

Tell me exactly WHEN was the last time that prices got lowered because people whined about it? Exactly when does the public have any concession options towards price increases? I'd like to know since the price of gasoline is just getting out of hand. I'd personally like them lowered by about $2.00 a gallon. If for anything at all, just to keep Chevron and Exxon from posting that the cost is increased due to production costs and then turn around and post yet ANOTHER record breaking PROFIT YEAR!

I think that the above statement is a true reflection of exactly WHO is paying for this country's government! The middleclass has born the burdon for way too long.

There are many, many folks out there that do not have debit or crdit cards. Are they to starve because, since the elimination of cash, because they have no way to pay for necessities?

It seems to me that the folks who post on these forums, or any forum for that matter, have enough extra money to pay for laptops, notepads, iphones and/or internet connections that eliminating cash seems like a viable option. Unfortunately, there are probably just as many folks that cannot afford the above luxuries.

But then, perhaps we should all get back to trading chickens and cows?

 

Rounding on the elimination of the cent?
Sales taxes are rounded to the nearest cent. Not on each individual taxable item, but on the total of all of the taxable items purchased.
If the cent is eliminated, prices of individual items will not increase by 1 to 4 cents, they will stay the same. The rounding will be done on the final total of your purchases, whether it be 1 item or 32 items or 158 items.
The implication of price of individual items being raised by 1 to 4 cents, or 1 to 9 cents if the nickel is eliminated, is just a scare tactic put out by those opposed to the elimination of the cent (and nickel).

 

Hee hee hee! That's rich. Pics or it didn't happen. ;-)

Bollocks. When the 1/2 Cent was eliminated, there was no 1/2 cent increase in prices across the board and when it was eliminated, it was worth 11, almost 12 modern cents. There were also no increases in other countries that in modern times have eliminated their cents. The "1-4 cent raise in price" is an old wives' tale.

Inflation is a completely separate process. The key is that we need our circulating money to reflect what things are *worth*; not believe that our coins will influence it the other way around!

Think of how quickly denominations of Zimbabwe Dollars changed? This was due to massive hyperinflation. The numbers could barely keep up with how quickly the value of the Z$ was declining. We've had that creep over a long enough period of time that certain denominations are just as worthless, but haven't been updated.

Also, guess what? Price rounding already happens on army bases. They don't use pennies there at all because of how little they're worth. And no, prices aren't all rounded up.

You don't get it. Even if the materials for Pennies and Nickels were free, simply the gasoline costs and wages for handling staff to ship them into circulation is already over their face value. They are a serious money sink.

Furthermore, I'd prefer a pocket full of $1 coins than a pocket full of quarters. Quarters weigh a heck of a lot more per dollar.

Slippery slope. That's a "logical fallacy" for a reason. Not going to happen in our lifetimes, or even our grandchildrens' lifetimes. Or probably not at all. (Again, remember they can always print larger numbers on the bills.)

 

The current figure is about 1 in 34, not 1 in 10, and those are the £1 coin designs that haven't been updated in years (i.e. since it was first issued). The Royal Mint is currently in the midst of updating their coinage like Canada has (and the new Canadian designs are tough to fake convincingly).

As a collector of counterfeits, I can tell you that it won't matter the medium:

1) Counterfeits happen.
2) No date, issue, or serial number is scared.
3) The only defense is education.

 

I do not think that the Where's George game is lame at all. It gives the player an idea of how far money travels and how long it takes to get there. Of course, it requires folks to participate but its far from "lame".

 

If anything, I think it would solidify the use of $X.X9 pricing. Stores will love to price items at $0.49, or $1.99 or $2.99, in hopes that not only will people do as they do now, see an item priced at $1.99 and say to themselves "Oh, that's only a dollar and change, that's a good price", but also they'd get to cash in on people only buying one or two items and then they get to round up. Heck, I would imagine the way it would work is congress would allow stores to always round up.

Another thing to consider if they eliminate the cent, is it'll probably still be possible to charge the exact amount to your credit or debit card.

As for the OP - Wouldn't it be better to say "Plans to end the dollar bill are being pushed" or "Plan to end the dollar bill is being pushed"? :yes:

As for eliminating the dollar bill? Just do it already!

 

Absolutely correct!

Psychology 101 and Retailing 101. The item priced at $1.99 is generally perceived as much less expensive than that same item priced at $2.00.

The sign on the pump says $3.59 9/10. Ask someone the price of that gasoline. They will always respond with $3.59. That's why the gas is not priced in whole cents. It looks like it's a whole cent cheaper.

In retailing, 9 is a magic number.

 

In California there is a chain called "99 Cent Stores" which advertised for many years that everything was priced at 99 cents or less.

Then, fairly recently, they decided that was too cheap and raised their prices to 99.9 cents, and most people still don't realize that now they charge a dollar per item, unless you buy 10 items at a time, in which case you do get 1 cent change for your sawbuck (before sales tax, or course).

 

Yeah, we've got that same chain store here in metro NY, Hontonai, though the prices have climbed somewhat (exceedingly) above the 99 cent mark.

 

interesting take

 

Heck, I don't think it would be hard at all for the mint to puke out a few billion dollar coins in short order.......