The U.S. could save billions of dollars by getting rid of the paper dollar, according to the Government Accountability Office.
The coins might weigh heavier in your pocket, but using a dollar coin makes more sense – and cents – in the long run than dollar bills.
At a hearing before the House Financial Services Committee Thursday, Lorelai St. James, a director at the GAO, plans to tell Congress that switching from paper currency to dollar coins would ultimately be more cost effective, the Wall Street Journal reported Wednesday.
Last February, the GAO reported that making such a switch would save the country $4.4 billion over the next three decades - or about $146 million per year in savings.
Shawn Smeallie, executive director of the Dollar Coin Alliance, said the savings could be as much as $11 billion over a period of 30 years, without cutting any programs or raising taxes.
But defenders of the paper dollar have focused on another aspect of the report: In the first 10 years of the switchover, the government would lose more than $500 million, according to the GAO.
“This report is crystal clear about one thing: The unwieldy dollar coin is more expensive than the popular dollar bill, even over the long run,” outgoing Sen. Scott Brown, R-Mass., said in a statement last February. “The dollar bill will continue to be the more cost-effective currency to produce and use.”
Although public opinion is generally against a dollar coin, Smeallie said that people were more likely to support the idea if they were told of the billions in savings.
“When you dig into those polls and ask people if you knew it was going to save billions of dollars, it completely flips,” Smeallie said in the Wall Street Journal. He compared the paper-to-coin changeover to America’s switch to digital cable.
“Congress was wringing its hands for a year on that,” Smeallie said. “And when it happened no one cared.
ABC News reported in 2011 millions of dollars of coins were already being produced and stored in the U.S. Mint in Philadelphia without going into circulation
The Mint reported putting almost 300 million presidential $1 coins into circulation in 2011. But the amount of coins needed to replace dollar bills would be in the billions.
Smeallie believes the U.S. could be producing dollar coins at those levels in the next year or so.
“Every year that we don’t do this we’re wasting money, wasting the savings that we could have,” Smeallie said. “It’s just one of those things that’s inevitable. We might as well do it sooner rather than later.”