The Van Buren Experiment

Interesting Itemization

2011-08-06T17:20:00.002-04:00

I paid for an item at the self checkout at Home Depot tonight. After getting home, I glanced at the receipt before discarding it. And I noticed something odd: there were four tender lines listed, like this:

Sales Tax 0.34
Total 4.55
Cash 1.55
Cash 1.00
Cash 1.00
Cash 1.00

Seems that each dollar coin I deposited forced the computer to add a new cash line. This is particularly strange to me because the receipt is printed at the end of the transaction, not during the transaction.

Sarcasm and Eggs

2011-08-03T17:09:00.003-04:00

I thought I had all the ingredients I needed for cookies, but having just returned from a vacation, realized that I didn't have a staple food -- eggs -- in the fridge. Fortunately there's a small grocery store just down the road, and they were open for another 30 minutes. I usually pay with my credit card for groceries, but I knew this would be a small transaction. Grabbing my keys and a few Good Ones, I headed out the door.

The eggs were more expensive than at the supermarket, but at $1.99, it was a perfect purchase amount for paying in coin. Plunking down two shiny golden discs garnered a moment of hesitation from the cashier. Then she offed an, "Oh, smooth." I couldn't quite tell if it was sarcasm, thinking I was "getting rid" of the dollar coins, or maybe it was a genuine response to the collected manner, suave stagger, and coin confidence that I exude.

But she didn't give me my penny in change, so I'll assume it was the former.

Tender: $2,
Response: Sarcasm?
ACI: 0.4

The GAO Knows What's Up

2011-03-04T19:32:00.002-05:00

This is nothing new, but yet again, the GAO has put out another report on replacing Bad Ones with Good Ones. And, as expected, they state that their findings point toward cost savings for the government.

It's only 41 pages, but if you don't want to read through it, here are some of the key parts:

The estimated savings have been decreasing over time; this is due to the increasing lifespan of Bad Ones. This makes sense.... as the population relies more on plastic and electronic transfer, cash money is used less frequently.
In one of their alternate scenarios, the GAO factored in increased demand for $2 bills, estimating that 25% of dollar demand would convert to demand for Jeffies.
The Mint's own experiments in various cities showed that public acceptance of Good Ones did increase modestly after their pilot programs completed.
Retailers interviewed for the report stated that they would incur higher costs, but couldn't quantify them.
Other countries have made the switch, followed by a short period of public displeasure, then everyone got on with their life.

Will the current push for cutting government spending bring this report to the attention of Congress? Time to start a letter-writing campaign?

Post Office

2011-02-19T19:18:00.002-05:00

Ok, I could have used a fiver and two Good Ones, but I happened to have enough with me to pay in all coin. Response from post officers each time I use Good Ones has never been very irksome, so I opted to push it a bit this time.

After handing over my handful of clean, shiny, easy-to-count coins, the post officer let out a sigh: "God, I hope you're almost out of these things!"

I assume she was talking about the quarters.

Tender: $7.75, 7 Good Ones, 3 quarters
Response: Disdainful acceptance
ACI: 0.6

Humiliation!

2010-12-23T21:50:00.002-05:00

It was supposed to be simple: all I needed to do was pick up one last Christmas gift, instant lotto tickets. Priced at a buck a piece, it sounds like an ideal dollar coin purchase, doesn't it?

Not so!

After two failed attempts (what convenience store wouldn't carry lotto tickets?!) I headed to a grocery store where I knew I could make my purchase. Walked through the door, spotted the PA Lottery vending machine. Perfect. Only.... this vending machine did not have a coin slot. Inconceivable! It only accepted bills.

Begrudgingly, I skulked over to a register to -- for the first time ever -- exchange a Good One for a Bad One. Of course the manager needed to be called over to make sure it was kosher. Public humiliation ensued. Then, as the cashier dipped into the dregs of the register to fish out a Bad One, she commented at the gleaming Good One, "Oh, do they still make these?".

No winnings came from the instant lotto tickets. This is obviously due to the tender that was used to purchase them; garbage in, garbage out.

Personal realization

2010-11-09T10:08:00.002-05:00

So, you may have noticed an absence of posts from me recently. I assure you it's not because of lack of support of The Good One. I knew going into this project that I don't like a bunch of things in my pockets. I have a skinny wallet, I keep my keys to a minimum, and a I usually don't carry change around with me. So a pocket full of dollar coins was always a bit irritating to me. For a while I would carry 2 or 3 around and it wasn't too bad, but it also didn't result in many Good One transsactions. Eventually, I stopped tossing those couple of coins in my pocket in the morning, and here we are.

I completely support the replacement of the dollar bill with coins, but my application will be a bit different. To me, the dollar becomes change. I will toss it in the change can at night. My wallet will be populated with $5 bills and up and things will go on just fine. I'll fill that change can a bit faster and it will be more valuable, so I'll end up taking that to the bank a bit more often. I think it's a personal cost that's worth it for the overall savings that can be realized with the switch to the coin.

I hope there are others out there who this might be helpful to. You don't have to carry a sack of gold coins around like a character in a Tolkien story to support the cause.

Another Use for Dollar Coins

2010-11-01T18:36:00.001-04:00

I had the good fortune of seeing Stevie Starr, The Regurgitator, live this weekend. For those that don't know, he's a Scotsman who has the unique ability to swallow objects and then recall them (intentionally). It's very entertaining, and not disgusting at all. Really!

The first part of his act entails swallowing coins and then bringing them back as requested by the audience. This required a volunteer to feed him the coins individually. Being both eager -- and in the front row -- I was soon on stage to do my part. And the coins that were used? 10 Good Ones. Some were presidentials, a few were Sacajaweas. I fed him all ten, which he returned at various times during the rest of the hour.

I can honestly say that this is one case where using dollar bills would not work.

$2 Coins

2010-10-30T18:29:00.002-04:00

Checking out at the craft store, just buying some black dye for a project. The total was small, so I paid the whole thing in coins. Upon receiving the good ones, the (young) cashier asked curiously, "What are these, two dollars each?" She wasn't annoyed; actually she was very cheerful. But also n00bish.

Tender: Two good ones, a quarter, a nickel
Response: Bubbly bewilderment
ACI: 0.0

Insert No Bills

2010-10-12T10:34:00.002-04:00

Hungry for Pop Tarts, I approached the lone vending machine at the train station. It was a modern, high-end one (I could tell by the blue LEDs) and naturally I was planning on paying with Good Ones. However, I did not realize it would be my only choice: flashing on the display was "insert no bills". Perhaps the machine was full of Bad Ones, or maybe the machine detected that its bill reader was busted. Regardless, it was a good day to be carrying Good Ones.

"Coins... Finally!"

2010-09-24T08:38:00.002-04:00

I was hosting a Canadian CouchSurfer last night, and we went to a restaurant for dinner. He was paying with a card, so I handed him cash for my part of the bill... and naturally, my cash included some Good Ones. His response? "Coins... finally!" After spending five days in the US, he was so glad to have dollar coins again, as is common in Canada. "People here," he lamented, "cling to paper dollars like they're worth something."

Tender: a tenner and 4 Good Ones
Response: Joy!
ACI: -0.3

Golf

2010-09-21T23:57:00.003-04:00

Paying for golf would ideally be a credit card payment situation, if it weren't for their 1991-era dial-up authorization. So cash it is. And this time I had sufficient coinage to do the transaction the correct way.

Upon slapping down three Good Ones at the register, the white-haired, wizened woman exclaimed, "I don't even know what these are!" I then distracted her with a Big-Head Jackson to complete the sale.

Tender: $20, 3 Good Ones, 4 quarters
Response: Wonderment
ACI: 0.2

Haircut Tipping

2010-09-07T11:01:00.001-04:00

If there's one place where I expected problems paying with Good Ones, it's tipping. I tipped a bathroom attendant last week, but that wasn't a big deal, since he took tips in a container which was full of coins anyway. It's a different matter altogether if you are required to hand someone a tip.

And so it was at Supercuts. I'd paid for the haircut with a credit card, and handed over two Good Ones as a tip. No sooner had I turned to leave than I heard two coins being plunked into the cash drawer and exchanged for Bad Ones.

Tender: $2
Response: Nonverbal disapproval
ACI: 0.8

Jeffy Sighting ... in Prague!

2010-07-26T03:20:00.002-04:00

In the touristy parts of Prague, there are quite a few casinos, mostly catering to tourists looking to get rid of their Czech currency before returning home. I walked by one casino this morning that had one of those big spinning money wheels, but loaded with US dollars instead. And they even acquired some Jeffies to stock it with:

Slick

2010-07-03T14:23:00.003-04:00

I walked to the post office today, intent on paying the postage on my Norway-bound envelope in all coins. As I handed over five Good Ones, the Post Officer exclaimed, "Oh, think you're slick, getting rid of them by giving them to me now!" I replied that dollar coins aren't so bad, and she eased up a little, noting, "Well, they sure are shiny."

People like the shiny. Shiny accounts for a 0.4 point reduction in ACI.

Tender: $5.64
Response: Playful regret
ACI: ~~4.6~~ 0.4

Good Ones are the Key

2010-07-01T16:08:00.002-04:00

Paying for a key duplication at the local giant blue home store. Self checkout with another heartless automaton, so you know it went well. These mechanical money takers just love them some Goodies.

Tender: 2 Good Ones
Response: Gleefully dispensed change
ACI: 0.0

Cheap Movie

2010-06-29T08:02:00.000-04:00

Went to see Hot Tub Time Machine at the local discount movie theater, not a bad film for its genre. Since the movies are $2 ($1 on Tuesdays!) A couple of shiny AJs seemed just the trick. Cashier accepted them without breaking her teenage angst one bit. Looked around the cash drawer for a few moments and then put them in with the dimes. The dimes?!? Not sure why AJ goes in with the FDRs, but who am I to tell her how to run her drawer?

Tender: 2 Good Ones
Response: Emo
ACI: 0.0

Toll Booth

2010-06-28T04:05:00.002-04:00

The unsuspecting toll booth worker thought it was an ordinary night. Low traffic, little communication, lots of limp dollar bills. Then at 3:30am, I rolled up. I dropped a Good One in to her hand, and gave it a quick tap, to let her know that it should be carefully inspected. Her eyes widened as the florescent lights of the toll booth lit up AJ's shining face. She was clearly dazzled. The weight of 8.1g of maganese-brass-clad copper in her hand. Old Hickory staring her in the face. The coin itself instilled with the accomplishments of the seventh president: elimination of the natoinal debt, surviving an assassination attempt, and generally being a badass.

Best night of her life? I think so.

Tender:1 Good One
Response: Dazzled.
ACI: Zip

The Copy Cat

2010-06-23T15:46:00.003-04:00

I decided to take a cue from Mike and drop my first Good Ones into the vending machine.

Tender: 2 Good Ones

Response: The machine didn't care, but the guy in line behind me was annoyed that I was using coins. Until he noticed that I was only using 2 coins.

ACI: 0.1

Starting off with a clank

2010-06-22T16:11:00.003-04:00

Traded in some folding greenies for my share of the latest batch of Good Ones this morning. Spent my first of Phase 2 in the vending machine just now.

Tender:1 Good One
Response: Resounding clank as it landed in the empty dollar coin bin
ACI: 0.0 from the soulless machine

Kicking off VBE Phase Two

2010-06-22T13:38:00.000-04:00

Our box of Denver-minted Andrew Jackson dollar coins arrived today, and Mike has already bought his share. We will be running The Experiment the same as before, which requires participants to:

Relinquish all Bad Ones to a Bad One Containment Recepticle until the end of The Experiment
Exchange any Bad Ones obtained for a Good One from the personal stash
Use Good Ones in all circumstances just the same as using a Bad One

The goal of all of this? To get dollar coins into the local economy (part of The Plan) and to document the reactions of the recipients (making special note of Anti-Coin Ire). We aim to be both informative and entertaining.

I will admit that after Phase 1 wrapped up, it was a little underwhelming; there just wasn't as much Anti-Coin Ire out there as we expected. Perhaps this time around we'll try to get ourselves into more interesting situations.

Taco Bell On-Board with Twos

2010-06-11T11:34:00.003-04:00

Longtime readers will know that our plan to revamp the US hard currency system is contingent on three things: dollar coins, $2 bills, and eliminating Bad Ones. I'm happy to announce that we have a new ally: Taco Bell.

In a press release, the company calls on the Fed to increase circulation of the two, as it is expecting rampant demand for it's $2 combo meal offerings. A publicity stunt? Perhaps. Or maybe the Taco Bell Cashier Efficiency Council has concluded, after extensive research, that cashier productivity increases dramatically upon receipt of a single bill for purchase. No counting required. More clients are served in a shorter amount of time. Everyone is happy: Taco Bell, the cashier, the customers, the cows making the sour cream.....everyone.

Don't you want to be happy too?

MVB Update

2010-06-11T11:28:00.002-04:00

It's been a long while since Phase One of the Experiment ended. We had planned on starting Phase Two shortly thereafter, but Martin Van Buren dollars never made it into the Direct Ship program. We all returned to using Bad Ones to pay for things.

It's been dark times.

But now the dust covers are coming off, and we will soon have a new set of Good Ones to stimulate the economy with. We've decided that Andrew Jackson dollars will be suitable for Phase Two, although we remain vigilant in our search for MVB dollars.

Stay tuned.

Martin Van Buren Day Heartbreak

2008-11-14T01:30:00.003-05:00

The Martin Van Buren dollar coin was officially released on Nov. 13. Alert readers may recall that the acutal Van Buren Experiment will begin when we start spending MVB dollar coins (the JQ Adams coins were just a trial run). Needless to say, MVB Day was a special Thursday for all of us.

However, we did notice that Martin did not appear on the Mint's Direct Ship order page. The Direct Ship program is how we acquire our dollar coins. Somewhat -- but not needlessly -- alarmed, I phoned up my friends at the Mint, and inquired about Marty's absence from the Direct Ship page. I was told that Marty will be a part of the Direct Ship program, but maybe not until next year. Forsooth!

Next year isn't very far away, and I still have a few JQA Good Ones left, but this news is still unwelcome.

If you're in the Kinderhook, NY area, and are under 18, you can get your hands on a MVB Good One by attending the coin inauguration on Marty's birthday, Dec. 5. Lucky bastards.

Second Chances

2008-10-17T11:27:00.002-04:00

I thought I had used my last Good One in the most pathetic of ways, dropping it in the vending machine. Those mechanical cashiers never give us any lip and happily take our coins, not generating anything interesting to post. However, oh joy of joys when I discovered a pocketful of the golden discs when dropping a pair of pants in the hamper!

Let the ire resume!

Spotted!

2008-10-12T18:12:00.002-04:00

Spotted this on the whiteboard outside the bank in the local Stop & Shop today:

Maybe they knew one of the Van Buren boys would be stopping by?

It's coin madness

2008-09-25T09:45:00.005-04:00

The Mint announced recently that it will be making some changes to the penny. Unfortunately, those changes do not include getting rid of the infernal thing. The redesigned penny will be released next year.
US Mint press release.

Soul Dog

2008-09-20T08:25:00.002-04:00

Lunch at Soul Dog (a really good hot-dog place in Poughkeepsie, if you're not familiar).

beef dog with Soul Sauce, red onion and kraut
chicken sausage with chipotle sauce and caramelized onion
order of Soul Fries
Fizzy Lizzy tangerine soda (which I didn't like)

Total: $12 even.
Tender: A 20 and 2 Good Ones, plus a Good One in the tip jar.
Cashier reaction: Confusion ... enlightenment.
ACI: 0.1 had to point out that they were dollars.

However, on Sean's purchase before mine, she really missed it and was asking him for more money.

Spreading the word, educating the masses.

I'm also down to 8 Good Ones.

Return of the Half Dime?

2008-09-19T20:03:00.004-04:00

A member of congress recently introduced a new bill that would replace the nickel with a new half-dime. While this is unlikely to see the light of day (this year at least), it is still of interest to those of us interested in changing US coinage.

But what does this have to do with dollar coins? It turns out that the half dime is a brother of the dollar coin, being one of the original US coin denominations. Also, like the new dollar coin, the new half-dime would reduce minting costs, due to less material being required. The suggested size of the new half-dime would be smaller than the current dime.

Would the adoption of a half dime be easier than that of the new dollar coins? Hard to say. From a heavy-pants perspective, half dimes would be much lighter than nickels, the bruisers of the coin world. A half-dime smaller than a dime would allow the diameter-to-value mapping to work better; silver coins' size would be representative of their value. This also means there is a chance that the new coin might be confused for another. Vending machines would need to change too.

No luck again

2008-09-11T07:26:00.002-04:00

Once again, the 50/50 raffle at the club meeting. Same guy too.

Tender: 2 Good Ones
Response: "Jesus Christ, not these again!"
ACI: 0.7
Amount won: $0.00 as usual

The King

2008-09-06T19:28:00.002-04:00

Value Meal, Kids Meal at the King of Burgers.

Total: $11.20
Tender: A 20, a Good One, and 2 thin dimes
Reaction: Absolutely none, A tenner back in change.
ACI: 0.0

Dollar Coin Circulates Blazingly Fast at Chinese Restaurant

2008-09-05T13:13:00.000-04:00

Chicken with string bean and a Dr. Pepper.

Total: $7
Tender: A five and 2 Good Ones
Cashier Response: Didn't even blink
Anti-Coin Ire: 0.0

After paying, a friend of mine received one of my dollar coins as change. He then exchanged it for a Bad One (the mad fool!) with another friend, who then turned around and found Sean wanting to exchange it once more. This works out to a rate of about 100 transactions per hour for that one dollar coin. Unfortunately, only the first two were legit; the rest were propelled by like/dislike for the dollar coin.

Dirty Bad One

2008-09-01T16:05:00.003-04:00

Found this on the Small Dollars site; I think this shall be the official poem of the Van Buren Experiment.

Paying at Soul Dog restaurant

2008-08-29T19:06:00.002-04:00

A cookie, a can of cel-ray soda, and the sausage special.

Total: $7
Tender: 2 Good Ones and a twenty
Cashier Response: "These are considered dollars, right?"
Anti-Coin Ire: 0.1

It's spreading!

2008-08-26T11:21:00.004-04:00

I received this IM mere moments ago:

Dude, you're like a virus. ******** paid partially in $ coins for trap last night.

It appears that we may be having some localized influence, or it's just a fluke.

Either way, Muahaha haha haha!

Paying at the Golf Course

2008-08-25T19:50:00.001-04:00

Total: $14
Tender: A tenner and 4 Good Ones
Response: "Are you sure you want to get rid of these?"
Anti-Coin Ire: 0.0

The woman collecting the green fees was older, and the coins were particularly brilliant (new from the roll). I have found in general that older people seem to be more interested in new US coinage. My grandfather sent me a Sacagawea when they first came out. My great-grandfather put some of his retirement cash into coin proof sets. And when I worked in the movie industry, our elderly usher would come to my register daily to swap a few Bad Ones for the new state quarters. Is it that older people like the feeling of real hard currency? Perhaps it brings back memories of the past, when coins made up a larger percentage of pocket money. Or maybe, like crows, they're attracted to shiny things.

Vending Machines

2008-08-24T21:28:00.000-04:00

While fleshy cashiers may frown at the sight of a dollar coin, many vending machines gladly accept them. The vending machine industry is one of the proponents of dollar coins, as coins are easier for the machines to deal with; more than half of machine service calls are due to fix nonfunctional bill acceptors. So adapting vending machines so that they accept dollar coins actually saves the operators money in the long run.

However, in some recent digging I found something interesting while reading the Presidential $1 Coin Act of 2005. Check out section 104:

...all entities that operate any business, including vending machines, on any premises owned by the United States ... shall take such action as may be appropriate to ensure that by the end of the 2-year period beginning on such date--

(A) any business operations conducted by any such agency, instrumentality, system, or entity that involve coins or currency will be fully capable of accepting and dispensing $1 coins in connection with such operations

Stamp and subway ticket machines have been a primary channel for the distribution of dollar coins, even before the Sacagawea. But section 104 seems to stipulate that any vending machine on the premises of a government agency needs the capability of dispensing dollar coins. That means snack machines, drink machines.... pay phones? arcade games?

This sounds good to me. I am unsure why -- a year after this was supposed to kick in -- the government hasn't done something to enforce this, like fining people, or declaring martial law.

Even without intervention though, I think inflation will save the day. Eventually a Coke is going to cost $3.75. People are will want to be able to pay with a five and get change, instead of trying to find 4 acceptable bad ones, or using a fistfull of quarters.

Making noise and busting birds

2008-08-19T16:54:00.002-04:00

4 rounds of trap shooting at the aforementioned local club.
Total: $12
Tender: A tenner and 2 Good Ones
Response: "You going to pay me with those Euros?"
ACI: 0.2

Paying at the Pharmacy

2008-08-17T18:07:00.000-04:00

Total: 16.99
Tender: sawbuck, fiver, and 2 Good Ones
Cashier Response: Confusion, sad face
Anti-Coin Ire: 0.3

Take me out to the ball game

2008-08-15T00:28:00.001-04:00

11 inning marathon baseball game at the local minor league team stadium. Which the home team finally won!

3 Good Ones for cotton candy, response: "Cool, I love these!"
2 Good Ones for a carnival game, response: "Wow, these are shiny!" (Though these were proxied through my 5 year old)

Total: 5 Good Ones.
Anti-Coin Ire: 0.0.
Won in the game: 1 set of team postcards.

What are those?

2008-08-14T09:31:00.001-04:00

At a local club meeting, where there is the common 50/50 raffle, purchased 2 tickets with 2 Good Ones. Response: "What are those? That's not even real money!". Accepted anyway.

Tender: 2 Good Ones
Anti-Coin ire: 0.7
Total won in raffle: $0.00

Quite a Coincidence

2008-08-13T21:45:00.000-04:00

I was doing some research on my favorite US president, Teddy Roosevelt, and discoverd that he is the third cousin, twice removed of none other than Martin Van Buren! How about that. This only solidifies the fact that MVB was a good choice to name our experiment after.

No drama yet

2008-08-10T13:06:00.000-04:00

So far things have been pretty uneventful for me. A few Good Ones accepted at the vending machine with no protest, one at the toll booth since I forgot my EZpass on the motorsickle, and one at the cafeteria without a blink.
I'm getting used to the additional baggage in my pocket. I don't typically like a bunch of change in my pockets, but the Good Ones don't seem so bad for some reason.
I do notice that I'm much more jingly lately.

Paying at the Post Office

2008-08-09T15:54:00.000-04:00

Total: $2.00
Tender: 2 Good Ones
Cashier Response: "Ooh, yeah!"
Anti-Coin Ire: 0.0

The Coins Have Been Disbursed

2008-08-05T14:54:00.001-04:00

Ok, 250 dollar coins have arrived from the Treasury, everyone is back in the US, and the coins have been distributed. 83 for Mike, 83 for Sean, and 84 for myself. None of the participants in the VBE really know how long it takes us to go through 83 single dollar bills ordinarily, but we assume one of us will spend-out quicker than the others. Personally, I only really use cash for restaurants, vending machines, tolls, and smalls tabs (<$10). So I should be set for a few months. But until I spend-out, I shan't keep any Bad Ones on my person. I've seeded my pocket with 4 Good Ones to start things off.

The Experiment

2008-08-01T13:14:00.000-04:00

So, what's this experiment about?
In the most simple terms, we're eliminating the Bad Ones (dollar bills) and replacing them with Good Ones (dollar coins) in our daily lives. We ordered a quantity of coins directly from the US Mint and have split them up (though I think Chris got one extra, that sneaky bugger). We'll be using them as one would expect and reporting the results here. The rules are pretty straight forward:

Use a dollar coin wherever you would have used a dollar.
Use them in a "natural" way, don't give 8 Good Ones for an $8 charge.
Any Bad Ones received must not be reused.
Received Bad Ones should be swapped out for Good Ones ASAP.
Report on your experience.

At the end of this experiment, we should have a good read on what the general acceptance factor of the Good One is, and what it's like to live with them.

Why Van Buren?
Martin Van Buren was the 8th US President. He was the first to be born a US Citizen, and the first of non-British descent. In the financial realm, Van Buren initiated an independent federal treasury system.

On a more personal note, he was born in Kinderhook New York, which is right nearby. It also allows us to refer to ourselves as "The Van Buren Boys", which, among other things, is a reference to the street gang from the Seinfeld episode. The most compelling thing of all is, of course, his hair, takes guts to have a 'do like that.

Unfortunately, the Van Buren coins aren't available yet, so we've had to choke down our tears and learn to live with the John Quincy Adams Good Ones. He does still have mutton chops, but they pale in the face of the magnificence that is Marty.

The Coins Are Here

2008-07-26T13:10:00.000-04:00

I picked up the box of coins from the post office today. As expected, it was a small, heavy box. Luckily, shipping was free with the Direct Ship program. I'll have to hang on to these until Mike and Sean return. Then the Experiment shall begin.

The Problem with Cash Money

2008-07-21T17:00:00.000-04:00

Over the past year, we have discussed how to fix the US money system. Not monetary policy macroeconomic stuff... just cash money. There are several problems with the current system:

The Penny

The Dollar Bill

almost half

US Bills

Not being content with mere complaining, we have proposed solutions for each of these. For now, I will present the solution to #2: The Dollar Problem.

Introduce a Dollar Coin

Increase production of the $2 bill

Withdraw the $1 from circulation

End result: commerce will continue without the dollar bill, and The Treasury will save a bunch of money. Using 2007 numbers, the Bureau or Engraving and Printing spends over a million dollars per day to manufacture dollar bills:

(notes per day) x (portion of notes that are dollars) x (cost of one note)
38,000,000 x .4547 x .062

We figure that somewhere around 30% of that production will switch to $2 bills, representing replacement of 60% of the $1 note's dollar value entering circulation. This will cost about 320k/day. The remainder of the dollar value will be made up using dollar coins. Comparing production cost between the $1 bill and the $1 coin is only effective if the cost per circulating month is compared; this is not possible as the current dollar coin does not have a known lifespan. But if we estimate that a $1 coin will last 2 decades -- or about 10x longer than a bill -- then the cost of minting the coin at 62 cents would result in the circulating cost per month being even between the two. Even at an unrealistic price of 62 cents, The Treasury would have a net savings of 30% per day, or about $80M per year. At current metals prices though, actual savings is likely to be north of $100M.

Let's do it.