By PlanetLaundry staff | Mar 18, 2011
The U.S. Government Accountability Office recently issued a formal proposal to the Treasury and Federal Reserve noting that if it eliminated the $1 bill and replaced it with the $1 coin, the country could save roughly $5.5 billion during the next 30 years.
The proposed savings are due to the fact that dollar bills have a shorter lifespan than dollar coins because they wear much faster, which in turn requires the government to spend more to print new bills.
The GAO estimated that phasing out dollar bills in favor of coins would require a four-year transition period, during which the government invests in the new currency, but following that, the government would save an expected $522 million each year from the change.
However, as the GAO explained, there is one problem with the plan: When given a choice between dollar coins and dollar bills, Americans always choose bills.
"GAO has noted in past reports that efforts to increase the circulation and public acceptance of the $1 coin have not succeeded, in part, because the $1 note has remained in circulation," the agency wrote in its report.
If the U.S. is ever going to make the switch to dollar coins, as other countries like Canada have done, the GAO suggested the only way to do so is to phase dollar bills out of circulation altogether.
The GAO has made similar proposals four times during the past two decades.