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<p>[QUOTE=&quot;bdunnse, post: 1912564, member: 57317&quot;]Coinweek article from a few years ago...</p><p><br /></p><p><a href="http://www.coinweek.com/featured-news/the-coin-analyst-overview-of-house-hearing-on-the-future-of-money-dollars-and-sense/" target="_blank" class="externalLink ProxyLink" data-proxy-href="http://www.coinweek.com/featured-news/the-coin-analyst-overview-of-house-hearing-on-the-future-of-money-dollars-and-sense/" rel="nofollow">http://www.coinweek.com/featured-news/the-coin-analyst-overview-of-house-hearing-on-the-future-of-money-dollars-and-sense/</a></p><p><br /></p><p>Partial quote...</p><p><br /></p><p>&quot;Former Mint Director Diehl made a strong case for replacing dollar notes with coins. He explained that the key to a successful dollar coin program includes several elements, namely, getting rid of paper dollars, explaining the cost savings to the public, and making the coins readily available, which has been a major problem since the 2007 launch of the presidential dollar coin.</p><p><br /></p><p><b>Mr. Diehl said that the Federal Reserve Bank has a clear preference for paper dollars, mainly because they get them at cost from the Bureau of Printing and Engraving, which is minimal, whereas they pay full face value for dollar coins, which only cost the Mint 18 cents to produce.</b></p><p><br /></p><p>In addition, when the presidential dollar program was launched in 2007 the FRB instituted a requirement that banks had only two weeks to order each new coin, so it was impossible for banks to keep the coins in stock, and the coins continued to pile up in FRB vaults. Dollar coins were declared a failure, but they were never really given a chance.</p><p><br /></p><p>Mr. Diehl also drew from his experience launching the Sacagawea dollar in 2000. Because he was aware of the FRB’s preference for notes and the fact that they told the Mint they would not make the coins available unless the Mint could first demonstrate demand for the coins, which created a Catch-22 situation, Mr. Diehl bypassed the BEP and had Wal-Mart distribute the coins. Wal-Mart distributed 100 million coins in a few weeks and wanted more, and demand clearly exceeded expectations.</p><p><br /></p><p><b>He ended by pointing out that the FRB’s preference for dollar notes is easily explained by the hundreds of billions in seigniorage they would lose by getting rid of notes</b>, and that he questions their current estimate that paper dollars now last 56 months. He wonders why bills would suddenly last so much longer than they used to.</p><p>Former OMB Director Miller provided the opposing argument, that replacing dollar notes with coins is a “budget gimmick,” not a serious cost-cutting measure. He noted traditional opposition to coins, the tendency to save rather than use them, what he views as the questionable assumptions behind the GAO’s estimates of cost savings from moving to coins, and finally, that the seigniorage benefit is really a tax on Americans, that is “an interest-free loan consumers would be forced to give the government,” and that it is a regressive tax because higher-income taxpayers tend to use non-cash payments like debit cards more than lower-income Americans.&quot;</p><p><br /></p><p>Done quoting stuff for now. <img src="styles/default/xenforo/clear.png" class="mceSmilieSprite mceSmilie8" alt=":D" unselectable="on" unselectable="on" />[/QUOTE]</p><p><br /></p>

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