replacing the dollar note with a coin would save $5.5 billion over 30 years
Frank Galikanokus
Mike Benveniste
> http://latimesblogs.latimes.com/nationnow/2011/10/dollar-bill-stop-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 here:
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
Peter Irwin
>
> 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.
--
pir...@ktb.net
Richard L. Hall
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 $5, or some variation
thereof. I wouldn't be displeased with an Indian Head/Buffalo motif either.
--
Richard
http://www.richlh.com
Faced with the choice between changing one's mind and proving that there is
no need to do so, almost everyone gets busy on the proof.
- John Kenneth Galbraith -
"Frank Galikanokus" <FrankGal...@nospam.net> wrote in message
news:4E96EE2E...@nospam.net...
>
> http://latimesblogs.latimes.com/nationnow/2011/10/dollar-bill-stop-printing.html
>
> JAM
Some Guy
"Richard L. Hall" <richll...@richlh.com> wrote in message
news:j7778i$s85$1...@dont-email.me...
>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.
Mike Benveniste
> Mike Benveniste<m...@murkyether.com> 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 -- m...@murkyether.com (Clarification Required)
You don't have to sort of enhance reality. There is nothing
stranger than truth. -- Annie Leibovitz
Peter Irwin
> 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
--
pir...@ktb.net
Jerry Dennis
>
> >> 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 <m...@murkyether.com> 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.
Jerry Dennis
I should clarify the brass bucks numbers are for Sacs and Prezibux
struck for circulation only (no proofs).
Jerry
Some Guy
"Peter Irwin" <pir...@ktb.net> wrote in message news:j7969v$5if$1...@dns.ktb.net...
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
Mike Benveniste
> 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 ($3,996,931,110.00) in brass bucks right now
> (through Hayes).just begging to be used. I'd say that's a fair start.
Had you read the GAO report, you would have seen that they did that
work for you and took it into account. They assume that 3 billion of
those coins are being held by the public, and that 1 billion of those
would reenter circulation in addition to those being held by the Fed.
Jerry Dennis
needed to get ready for work. Having read it, now, I agree with
you.
What I found funny is that the GAO couldn't come up with the mintages
for Ikes, but they're readily available in the Red Book. And in less
than one minute I google-searched and found many websites. Here's
just one:
http://eisenhowerdollarguide.com/eisenhower-dollar-mintages/
We all agree that there are roughly four billion dollars coins struck
and available for circulation. Since I have no reason to doubt the
report, I'll concede there are one billion held by the Fed. And with
312+ million people in the U.S., that works out to about 10 coins
per. Granted, most of us evil coin hoarders have more than one in our
collections, so that figure seems reasonable.
Jerry
Richard L. Hall
"Some Guy" <so...@guy.xxx> wrote in message
news:j77r1n$mt3$1...@speranza.aioe.org...
> "Richard L. Hall" <richll...@richlh.com> wrote in message
> news:j7778i$s85$1...@dont-email.me...
>>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.
because the government stopped printing 1 real notes in 2006 in favor of a 1
real coin. Eventually, I would guess that the 1 real notes will just wear
out and not be seen except in collections. I think I will have to see if I
can buy an uncirculated note at a reasonable price somewhere.
http://en.wikipedia.org/wiki/Brazilian_real
--
Richard
http://www.richlh.com
The happiest people in the world don't necessarily have the best of
everything. They just make the best of everything they have.
Some Guy
In my journeys to Brasil, I have used second cruziero, cruzado, third cruziero,
cruzeiros real, and real.
I figure the 100,000 second cruziero note I got there in 1985, if it could be
exhanged (which it can't), would be worth about 1/100,000 of a US cent.
The odd thing about living in Brasil's hyperinflationary economy is that
everything more or less went on as normal.
People went to work each day, restaurants served food, public transportation
worked.
Everybody would either get a stable currency (the US dollar was king) or put it
in the banks, which were offering incredibly high interest rates to keep up with
inflation.
Of course, eventually the government couldn't print enough money or the
denominations got incredibly large, then they'd institute another currency
plan - usually exchanging the currency at a 1000 to 1 ratio.
In the mid 80s, the American dollar was unbelievably strong vis-a-vis the 2nd
cruziero.
A couple could go to the finest restaurants in Rio and spend maybe US$20 or $30
for a fancy meal, wine and tip.
A good lunch at one of the numerous lunch stands away from the beach areas could
be had for $1.
Paul Ciszek
In article <j7hu09$dh1$1...@speranza.aioe.org>, Some Guy <so...@guy.xxx> wrote:
>Thanks for pointing me to the Wiki article.
>In my journeys to Brasil, I have used second cruziero, cruzado, third cruziero,
>cruzeiros real, and real.
>I figure the 100,000 second cruziero note I got there in 1985, if it could be
>exhanged (which it can't), would be worth about 1/100,000 of a US cent.
>The odd thing about living in Brasil's hyperinflationary economy is that
>everything more or less went on as normal.
>People went to work each day, restaurants served food, public transportation
>worked.
>Everybody would either get a stable currency (the US dollar was king) or put it
>in the banks, which were offering incredibly high interest rates to keep
>up with
>inflation.
US banks don't feel compelled to do so. My savings account pays 0.1%
APR, and before I landed at my current credit union, I had to keep moving
my money out of banks that kept deciding to charge for savings accounts.
--
"Remember when teachers, public employees, Planned Parenthood, NPR and PBS
crashed the stock market, wiped out half of our 401Ks, took trillions in
TARP money, spilled oil in the Gulf of Mexico, gave themselves billions in
bonuses, and paid no taxes? Yeah, me neither."
Some Guy
"Paul Ciszek" <nos...@nospam.com> wrote in message
news:j7ivta$e62$4...@reader1.panix.com...
> In article <j7hu09$dh1$1...@speranza.aioe.org>, Some Guy <so...@guy.xxx> wrote:
>>Thanks for pointing me to the Wiki article.
>>In my journeys to Brasil, I have used second cruziero, cruzado, third
>>cruziero,
>>cruzeiros real, and real.
>>I figure the 100,000 second cruziero note I got there in 1985, if it could be
>>exhanged (which it can't), would be worth about 1/100,000 of a US cent.
>>The odd thing about living in Brasil's hyperinflationary economy is that
>>everything more or less went on as normal.
>>People went to work each day, restaurants served food, public transportation
>>worked.
>>Everybody would either get a stable currency (the US dollar was king) or put
>>it
>>in the banks, which were offering incredibly high interest rates to keep
>>up with
>>inflation.
>
> Why did the banks pay interest greater than inflation?