EconoMeter: Should we replace the dollar bill with a coin?
Roger Showley, U-T SAN DIEGO
Friday, December 7, 2012
Kelly Cunningham, National University System
Costing much more to mint the first 10 years, savings occur the following 20 years as coins last longer. But the government needs to replace every two paper bills with three coins since the public resists using dollar coins. When the public does not use imposed coins, the government gains an equivalent voluntary tax and inflation increases with uncirculated money. Most of the 2.4 billion $1 coins already minted sit idle in Federal Reserve vaults and production was suspended last year. In an era of increasing use of electronic financial transactions, physical currency rapidly becomes less important for society in any case.