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Home / Business / GAO says swapping dollar bills with coins can cost billions: NPR

GAO says swapping dollar bills with coins can cost billions: NPR



A bunch of newly-made one-dollar coins formerly honoring Thomas Jefferson, is being unveiled by the US Mint in Washington, DC, in 2007. In a turn, congressional analysts no longer recommend a phase-out of paper dollars in favor of a dollar coin.

Jim Young / Reuters


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Jim Young / Reuters

A bunch of newly-appointed end-of-life coins honoring former Thomas Jefferson are being watched by the US Mint newspaper in Washington, DC in 2007. Conversely, congressional analysts no longer recommend a phase-out of paper money to benefit a dollar coin.

Jim Young / Reuters

In the case of dollars bills a new federal government report states that they last more than twice as long as they were at the beginning of the decade.

And it is aroused an old argument about switching the dollar bill with a $ 1 coin.

Analysts have long argued that the federal government could save money by hitting the switch because even though coins cost more to mint, they last much longer than paper money. In 2011, the Treasury Department estimated the $ 5.5 billion savings over 30 years.

But another look from GAO ​​flips that coin argument on its head. Analysts now say the government will lose between $ 611 million and $ 2.6 billion over 30 years by dropping the dollar bill. The economy has shifted because the dollar bills last longer.

"When we last looked at this question in 2011, the paper money was only for just over three years," said John Shumann, an assistant director at GAO. "When we looked at this problem again this year, we found out that the paper money now lasts almost eight years. "

Shumann said it is partly due to changes in how the Federal Reserve treats dollar bills. But it's also a sign that in an increasingly money-less world, paper money is not going around as they used to.

" often show minor signs of wear, "Shumann said.

As part of their research, GAO investigated many industries that could have a stake in the paper versus coin competition, and found most eager to take the switch to $ 1

Even the Coin Laundry Association.

"You know, that's right in our name," said CEO Brian Wallace, whose group represents about 30,000 self-service laundries around in the country

Despite f Or the name, only a handful of these companies now accept $ 1 coins. Meanwhile, alternative payment options have spread.

"You can still pay by quarter," Wallace said. "But you can also pay with a credit card or add value to a card. Or take the Starbucks approach to just turning the phone on the washing machine and it starts."

Other businesses that have long been associated with coins have also gone further. [19659008] "Once upon a time, toll roads, along with transit systems and the post office were even the largest coin companies in the country," said Neil Gray, director of government affairs for the International Bridge, Tunnel and Turnpike Association. [19659008] Not anymore. Fewer than one in five customs roads pay in cash today.

"To a great extent, we've had whole payment systems eliminate money altogether," Gray said.

Even slot machines have pretty much done away with coin slots.

(One exception is the gumball machine industry, which told GAO that it could offer higher quality rubber and toys if more had $ 1 coins.)

The new GAO report can counter the congressional effort to phase out the dollar bill. In any case, $ 1 coins have proven stubbornly unpopular with the audience. Therefore, the Fed has saved more than one billion of unused coins.


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