I first posted about the budget stupidity of the dollar coin more than two years ago.
At that time I stipulated that, in theory, a dollar coin makes a great deal of budget sense because it costs more to keep a dollar bill in circulation over a long period of time than it does to have a coin. Therefore, as the Government Accountability Office has said on many different occasions, the federal government could spend less by switching.
But...as I also said two years ago...the key phrase is "in theory." The savings only occur if dollar coins replace rather than supplement the dollar bill, that is, if consumers do something they've absolutely shown no inclination to do by not using bills, and if retail businesses are willing to pay the higher costs to them of using coins.
For some reason the dollar coin keeps coming up.
A press release in my inbox yesterday announced that Senators Tom Harkin (D-IA) and John McCain (R-AZ) had introduced the "Currency Optimization, Innovation and National Savings (COINS) Act" that would create yet another dollar coin. This is the Senate version of a bill introduced in the House last year.
I'm a little late to this party, but, because of an overwhelming lack of interest, the White House on December 13 announced the end of the presidential dollar coin program. That should be the end of dollar coins in the United States for a long,long time.
Long-time CG&G readers know that I don’t usually respond to comments on my posts. The biggest reason is time. The second biggest reason is that I see comments as an opportunity for members of the CG&G community to discuss among themselves what I've written. I read every comment; I just don't respond very often.
Over at TPM, Ryan Reilly has an intriguing post about the interest of some tea partiers for a new circulating dollar coin because it supposedly will save the federal government money. This follows a story in the Huffington Post from a week ago about how Rep. David Schweikert (R-AZ) introduced a bill that would eliminate the dollar bill and substitute dollar coins.
Here's some very personal and U.S. history about the dollar coin and why this is a terrible idea that is really nothing more than a corporate subsidy.
Congress in the late 1990s mandated that the U.S. Mint create a new circulating (rather than a collectible) dollar coin. This eventually became known as the "golden dollar" because of its color. It was also often referred to as the Sacagawea dollar because of the image of the native American woman on the coin.