Thursday, January 17, 2013

Why Do We Still Have the Dollar Bill?

I've said in the past get rid of the dollar bill. While this is probably the 20th time in the last 50 years that Congress has looked at the proposal, perhaps we will have some sense this time and do it. Don't bet the house on it (when has Congress made a fiscally sound decision in the last decade), but I'm hoping for a long shot here!

One thing why you shouldn't get your hopes up - the Treasury is finishing up an 18 month study of this issue. Whatever money we spent on this study is a complete and utter waste. Several countries have gotten rid of their $1 bills, and not just third world banana republics - trading partners like Canada, England, and even the Eurozone have recognized for decades that the $1 bill was a money waster.

The fact that we are behind several third world countries who don't have reliable running water or electricity is an embarrassment. If we really need a study, we should have asked the Canadians for their 30 year old study and then relabeled it - total price $100K. If the study from 30 years ago showed that it was cheaper back when everyone carried money, it is going to be that much more cheaper now that hardly anyone carries money. 

If it is the metal composition, we are also behind the eight ball. Since we stopped putting precious metals in coins in the 60s, we should have immediately gone to the cheapest metals possible. No sense in trying to pretend like the money has melt value. Once again, several other countries (including many banana republics) have done this. While I am not too keen on steel from a collector's standpoint, it is very practical. I'd prefer a chrome steel or nickel steel alloy that doesn't rust. Cupronickel is good (what our nickels are made from) but expensive. If we wanted to stick with this then get rid of the penny, nickel and quarter and just have dimes and half dollars (then no one will get the dollar confused with the quarter). Several countries use a stainless steel alloy which remains nice and shiny decades later. 

So, if all of these other countries have been able to figure this out, why do we need to spend 18 months and millions of dollars on a study to come up with the same answer? And people wonder why we are adding $1 trillion in debt each year. Easy, just take this philosophy and magnify it by every item in the federal budget.

One area of the economy that would be affected is strip clubs.  I am not sure strippers would like to be pelted with dollar coins for their performance.  However, this could easily be solved by the strip clubs printing their own bills and then patrons can purchase a bundle upon entering. The workers would then turn in their gathered bills at the end of their work day for real money.  (Sure, this would eliminate a lot of the under the table transactions that probably go on, but that would mean more tax dollars - its a good thing!) Disney does this as sort of a souvenir gimmick (or at least they did 30 years ago).  I have Disney Dollars (with portraits of Mickey and Goofy) that can be used as real money in the Disney themeparks, but have no value elsewhere.

1 comment:

  1. I lived in the Uk went they did this, i dont recall anyone asking or studying, they just did. Kinda like how Canada decided to not have the penny anymore last year.
    The real reason is the psychological aspect of the dollar being demoted to coin and the realization that $5 is the new $1.