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replacing the dollar note with a coin would save $5.5 billion over 30years



 
 
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  #1  
Old October 13th 11, 02:57 PM posted to rec.collecting.coins
Frank Galikanokus
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Posts: 291
Default replacing the dollar note with a coin would save $5.5 billion over 30years


http://latimesblogs.latimes.com/nati...-printing.html

JAM
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  #2  
Old October 13th 11, 04:08 PM posted to rec.collecting.coins
Mike Benveniste
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Posts: 36
Default replacing the dollar note with a coin would save $5.5 billionover 30 years

On 10/13/2011 9:57 AM, Frank Galikanokus wrote:

http://latimesblogs.latimes.com/nati...-printing.html


The only thing that's news about this is the dollar amount in the
estimate. Similar reports in the past have predicted much _higher_
savings. For example, in 1995 from the GAO and the Federal Reserve
estimated almost three times the savings -- $456 million a year:
http://archive.gao.gov/t2pbat1/154661.pdf

This more recent GAO report can be read he
http://www.gao.gov/new.items/d11281.pdf

Among the nuggets in the report are that it'll take until 2020
for the government to break even on the switch. Whether the
current Congress is willing to pass legislation which adds to
the deficit now for hoped-for savings down the road is left
as an exercise for the reader.

Then there's this little gem buried in a footnote on page 10:
"We recognize that societal costs—such as the costs to banks,
retailers, and other extensive users of cash—exist in addition
to the cost to government, but we could not quantify them
adequately to add to our analysis."

I submit to you that a change which puts money into government
coffers at a cost to society is indistinguishable from a tax.
I suppose there could be societal benefits that help offset those
costs, until someone _can_ quantify those net costs, in effect
the GAO is asking us to write a blank check.

--
Mike Benveniste -- (Clarification Required)
Its name is Public opinion. It is held in reverence. It settles
everything. Some think it is the voice of God. -- Mark Twain
  #3  
Old October 13th 11, 04:45 PM posted to rec.collecting.coins
Peter Irwin
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Posts: 64
Default replacing the dollar note with a coin would save $5.5 billion over 30 years

Mike Benveniste wrote:

Among the nuggets in the report are that it'll take until 2020
for the government to break even on the switch.


That seems overly pessimistic. At the time the toonie was introduced
in Canada, the loonie was already a major success, having produced
a saving of about half a billion dollars over nine years. And that
didn't include the gains from the 180 million or so dollar bills
that people stashed away.

Whether the
current Congress is willing to pass legislation which adds to
the deficit now for hoped-for savings down the road is left
as an exercise for the reader.

They already have nearly enough coins minted for a good start
at phasing out the dollar bill, so a decent portion of the
initial cost has already been spent.

Then there's this little gem buried in a footnote on page 10:
"We recognize that societal costs?such as the costs to banks,
retailers, and other extensive users of cash?exist in addition
to the cost to government, but we could not quantify them
adequately to add to our analysis."


I've talked to Canadian retailers, and there are very few who
would like to go back to notes for the one and two dollar
denominations. I expect that if you phased out the dollar bill,
there would be few American retailers who would want to go back after
the first decade.

I submit to you that a change which puts money into government
coffers at a cost to society is indistinguishable from a tax.


I think it will bring a net social benefit, so I'm not buying the
idea that it has a cost to society. There will be people who
save stacks (and possible commemorative sheets) of dollar bills
and that will amount to a sort of tax, but it will be purely
voluntary.

I suppose there could be societal benefits that help offset those
costs, until someone _can_ quantify those net costs, in effect
the GAO is asking us to write a blank check.


Unless the US experience turns out very differently from the Canadian
one, it will be seen as a net benefit. I see no reason to expect the
US to be that different.

Peter.
--


  #4  
Old October 13th 11, 06:30 PM posted to rec.collecting.coins
Richard L. Hall[_4_]
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Posts: 20
Default replacing the dollar note with a coin would save $5.5 billion over 30 years

I don't see any reason why we should stop at a $1 coin. Lets replace both
the $2 and $5 bills with coins also. We are about the only major economy in
the world that still uses paper for its basic currency value. At least I
can't think of another.

We can continue the Presibux format for the $1 until it runs its course.
However I would move the date to the reverse, keeping the presidential
theme intact on the obverse. And we could use bimetallics for the $2 and $5
coin. I wouldn't be in favor of putting dead presidents on any of the
coins.after the presibux format ends.

I wouldn't mind using the 1916 designs: Winged Liberty for the $1; Standing
Liberty for the $5; and Walking liberty for the $5, or some variation
thereof. I wouldn't be displeased with an Indian Head/Buffalo motif either.


--
Richard
http://www.richlh.com
Faced with the choice between changing one's mind and proving that there is
no need to do so, almost everyone gets busy on the proof.
- John Kenneth Galbraith -


"Frank Galikanokus" wrote in message
...

http://latimesblogs.latimes.com/nati...-printing.html

JAM



  #5  
Old October 14th 11, 12:08 AM posted to rec.collecting.coins
Some Guy[_2_]
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Posts: 107
Default replacing the dollar note with a coin would save $5.5 billion over 30 years


"Richard L. Hall" wrote in message
...
I don't see any reason why we should stop at a $1 coin. Lets replace both the
$2 and $5 bills with coins also. We are about the only major economy in the
world that still uses paper for its basic currency value. At least I can't
think of another.


Brasil is a major economic player and the residents there do not like to use
coins.
Haven't been there recently, so I don't know if their basic unit is still
available as paper.
Back in the 80s when Brasil was going through one of its periodic spells of
hyper-inflation, it got to the point that the lowest denomination bills wouldn't
be picked up off the street by even the most poverty stricken resident.
At the same time, they had a subsidiary coinage worth fractions of the lowest
denomination bill, which would have made the lowest denomination worth about
1/500 of a US cent.
The coins were struck in aluminum and were probably worth more as metal than as
currency.


  #6  
Old October 14th 11, 12:25 AM posted to rec.collecting.coins
Mike Benveniste
external usenet poster
 
Posts: 36
Default replacing the dollar note with a coin would save $5.5 billionover 30 years

On 10/13/2011 11:45 AM, Peter Irwin wrote:
Mike wrote:

Among the nuggets in the report are that it'll take until 2020
for the government to break even on the switch.


That seems overly pessimistic.


The estimate is from the GAO, which is also the source of the $5.5
billion dollar figure. The continue to to _favor_ the switch, so
they have little incentive to provide a pessimistic estimate.

The GAO did look at the Canadian experience. Among the things it notes
is that at the time, Canada's $2 bill circulated. The U.S. $2 bill
rarely circulates. People use less cash now than they did in 1987.
Also, due to improvements in bill handling machinery, the average
lifetime of a dollar bill is now 40 months rather than the 18 month
lifetime in 1987 Canada.

This in part, explains why the current estimate of savings is lower
than in previous studies. So much so, that if you exclude seigniorage
from the calculation, there's a net cost to the government over the 30
year period.

They already have nearly enough coins minted for a good start
at phasing out the dollar bill, so a decent portion of the
initial cost has already been spent.


The GAO disagrees, stating "For the current analysis, we determined
that the Mint would need to make various investments to produce
substantially more new coins in relatively few years." The numbers
aren't even close, because you need more than one coin to replace
one bill. Canada used a ratio of 1.6:1. The GAO wants to use a
ratio of 1.5:1 instead of 1.6:1, but even so that means the U.S. will
need over 13 billion additional dollar coins over 40 months.

I've talked to Canadian retailers, and there are very few who
would like to go back to notes for the one and two dollar
denominations. I expect that if you phased out the dollar bill,
there would be few American retailers who would want to go back after
the first decade.


Not surprising. Canadians already paid the cost to switch, so why
would they want to pay it again?

I think it will bring a net social benefit, so I'm not buying the
idea that it has a cost to society.


No offense, but you aren't thinking like "extensive users of cash."
Those costs are very real and out of pocket. While the GAO did not
quantify them, they did list them. Some are one-time expenses, such as
the need to retool cash registers, retraining, and upgrading armored
trucks. Others are recurring. For example, armored carriers such
as Brinks charge more to deliver coins to businesses than bills.

--
Mike Benveniste -- (Clarification Required)
You don't have to sort of enhance reality. There is nothing
stranger than truth. -- Annie Leibovitz
  #7  
Old October 14th 11, 12:26 PM posted to rec.collecting.coins
Peter Irwin
external usenet poster
 
Posts: 64
Default replacing the dollar note with a coin would save $5.5 billion over 30 years

Mike Benveniste wrote:
Also, due to improvements in bill handling machinery, the average
lifetime of a dollar bill is now 40 months rather than the 18 month
lifetime in 1987 Canada.


That does seem like it would make a difference.

No offense, but you aren't thinking like "extensive users of cash."
Those costs are very real and out of pocket. While the GAO did not
quantify them, they did list them. Some are one-time expenses, such as
the need to retool cash registers,


There is no such need. We just keep the loonies in the place designed
for 50 cent pieces (where people used to keep elastics and paperclips),
and put a dish in the one dollar bill slot to take toonies. $5 bills
go in the $2 slot and so forth.

retraining,


If you went to Boston fifty years ago, cashiers actually kept
half-dollars in the dish for half-dollars and kept two dollar
bills in the two dollar bill slot. Today they keep paperclips
and elastics in the half-dollar dish and put five dollar bills
into the two dollar slot. How much do you think the merchants
of Boston spent on retraining costs to get people to make these
changes? Do I hear "absolutely nothing"? The costs of "retraining"
for a dollar coin should be comparable.

Peter
--


  #8  
Old October 14th 11, 01:27 PM posted to rec.collecting.coins
Jerry Dennis
external usenet poster
 
Posts: 1,207
Default replacing the dollar note with a coin would save $5.5 billionover 30 years

On 10/13/2011 11:45 AM, Peter Irwin wrote:

On Oct 13, 11:08 am, Mike Benveniste wrote, in part:

Among the nuggets in the report are that it'll take until 2020
for the government to break even on the switch.


On 10/13/2011 11:45 AM, Peter Irwin wrote, in part:

They already have nearly enough coins minted for a good start
at phasing out the dollar bill, so a decent portion of the
initial cost has already been spent.


On Oct 13, 7:25 pm, Mike Benveniste wrote, in
part:

The GAO disagrees, stating "For the current analysis, we determined
that the Mint would need to make various investments to produce
substantially more new coins in relatively few years." *The numbers
aren't even close, because you need more than one coin to replace
one bill. *Canada used a ratio of 1.6:1. *The GAO wants to use a
ratio of 1.5:1 instead of 1.6:1, but even so that means the U.S. will
need over 13 billion additional dollar coins over 40 months.


Just for laughs, I put brass buck mintages on a spreadsheet using the
Red Book numbers and the Mint's website for circulating coins. There
are almost $4 billion ($3,996,931,110.00) in brass bucks right now
(through Hayes).just begging to be used. I'd say that's a fair start.

Jerry
P.S. - There were roughly 888 million Suzies and 682 million clad Ikes
struck that haven't been seen in years, either. I won't get into real
silver or gold dollar coins.
  #9  
Old October 14th 11, 01:38 PM posted to rec.collecting.coins
Jerry Dennis
external usenet poster
 
Posts: 1,207
Default replacing the dollar note with a coin would save $5.5 billionover 30 years

On Oct 14, 8:27*am, Jerry Dennis wrote:
On 10/13/2011 11:45 AM, Peter Irwin wrote:


On Oct 13, 11:08 am, Mike Benveniste wrote, in part:

Among the nuggets in the report are that it'll take until 2020
for the government to break even on the switch.


On 10/13/2011 11:45 AM, Peter Irwin wrote, in part:

They already have nearly enough coins minted for a good start
at phasing out the dollar bill, so a decent portion of the
initial cost has already been spent.


On Oct 13, 7:25 pm, Mike Benveniste wrote, in
part:

The GAO disagrees, stating "For the current analysis, we determined
that the Mint would need to make various investments to produce
substantially more new coins in relatively few years." *The numbers
aren't even close, because you need more than one coin to replace
one bill. *Canada used a ratio of 1.6:1. *The GAO wants to use a
ratio of 1.5:1 instead of 1.6:1, but even so that means the U.S. will
need over 13 billion additional dollar coins over 40 months.


Just for laughs, I put brass buck mintages on a spreadsheet using the
Red Book numbers and the Mint's website for circulating coins. *There
are almost $4 billion ($3,996,931,110.00) in brass bucks right now
(through Hayes).just begging to be used. *I'd say that's a fair start.

Jerry
P.S. - There were roughly 888 million Suzies and 682 million clad Ikes
struck that haven't been seen in years, either. *I won't get into real
silver or gold dollar coins.


I should clarify the brass bucks numbers are for Sacs and Prezibux
struck for circulation only (no proofs).

Jerry
  #10  
Old October 14th 11, 03:23 PM posted to rec.collecting.coins
Some Guy[_2_]
external usenet poster
 
Posts: 107
Default replacing the dollar note with a coin would save $5.5 billion over 30 years


"Peter Irwin" wrote in message ...
Mike Benveniste wrote:
Also, due to improvements in bill handling machinery, the average
lifetime of a dollar bill is now 40 months rather than the 18 month
lifetime in 1987 Canada.


That does seem like it would make a difference.

No offense, but you aren't thinking like "extensive users of cash."
Those costs are very real and out of pocket. While the GAO did not
quantify them, they did list them. Some are one-time expenses, such as
the need to retool cash registers,


There is no such need. We just keep the loonies in the place designed
for 50 cent pieces (where people used to keep elastics and paperclips),
and put a dish in the one dollar bill slot to take toonies. $5 bills
go in the $2 slot and so forth.

retraining,


If you went to Boston fifty years ago, cashiers actually kept
half-dollars in the dish for half-dollars and kept two dollar
bills in the two dollar bill slot. Today they keep paperclips
and elastics in the half-dollar dish and put five dollar bills
into the two dollar slot. How much do you think the merchants
of Boston spent on retraining costs to get people to make these
changes? Do I hear "absolutely nothing"? The costs of "retraining"
for a dollar coin should be comparable.

Peter
--


Things must be different around here because the registers I see don't have a
"two dollar bill slot"
They have $1, $5, $10, $20 slots..
Deuces, $50 & $100 bills go under the tray.
For coins they have 1¢, 5¢, 10¢ and 25¢ plus a spare where they toss the half
dollar and dollar coins


 




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