i want to respond to an opinion piece in my college paper that dismisses dollar coins. i do not so much want to blast his opinion, but his ignorance about the topic. i am curious how much it costs to produce a single dollar bill? thank you.
At a production rate of 3.5 billion notes in 2005, the dollar bill is the most widely produced of the bills. Cost to Produce: 4.0 cents per note Number Produced: 3.5 billion dollar bills Composition: 75% cotton and 25% linen I could be wrong but it cost double that to produce a dollar coin (roughly 8 cents)...I got this info from business week and confirmed this from the CBO (Congressional Budget Office) and the Committee on Banking. It goes on to say that although it costs more to make, it would save more in the long run to make coins instead of bills for the following reasons: Savings to the government in production and processing costs from substituting the more durable dollar coin for the Federal Reserve dollar note would be on the order of $150 million per year when the change is completed. Conversion would also have a favorable effect on the budget deficit. The Congressional Budget Office (CBO) estimates that over the 1996-2000 period, budgetary savings would total $100 million as a direct result of reduced production and processing costs. That estimate is based on a generic proposal that contains several key assumptions, including a 30-month lead tune before new corns would be placed into circulation, a 60-month conversion period, and an Increased circulation of two-dollar notes. After the switch to coin is complete, budgetary savings could exceed $200 million per year--an even larger amount than the government's saving on production and processing costs. Those savings, however, would occur well beyond the five-year window used by CBO to estimate budgetary effects. Differences between estimates of savings to the government by CBO, the General Accounting Office (GAO), and the Federal Reserve arise from measuring different items over different time frames, not from significant discrepancies over basic assumptions. Switching from one-dollar bills to one-dollar coins could also have secondary effects that could produce additional budgetary savings. Those effects consist of reductions in the interest costs on the government's debt and are not scorable under the Budget Enforcement Act (BEA). They would result only if the public was willing to hold a higher value of coins than notes; for example, if the public was willing to hold two one-dollar coins for each one-dollar note formerly held. http://www.cbo.gov/showdoc.cfm?index=5499&sequence=0
There's one more thing that most people forget, that is because of the similar material used to print for the other dollar bills, what people used to do is to bleach them and print a higher denomination note, i.e. counterfeit. Not saying that it happens nowadays due to the new color printing security. Coins last significantly longer - 40 years or so for against paper which is just a few months to a few years? I can't quite remember where I got that info from. Also, coins are an excellent way to store metals and you can always melt them down when prices get high, i.e. silver and copper. New Zealand got smart by removing their huge coins and replaced them with cheaper metals and smaller coins. Not too sure how much savings they made from that.
yeah, without doubt a coin, though it takes a bit more to produce, will last much longer than the average bill in circulation...
indeed. from what i can remember, the average life of a note in circulation is 16 months, while the average life of a coin in circulation in 40 years. that is a substantial difference which, over time, could lead to a great deal of savings.
