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Hard currency

Posted: November 8, 2011 - 1:02am

The following editorial first appeared in the Chicago Tribune:

The U.S. Mint’s presidential dollar coin series is all the way up to Rutherford B. Hayes, the Republican who served as our 19th president from 1877-81. Most Americans haven’t even seen the George Washington coin yet, and don’t want to.

Three out of four voters responding to a recent poll said they opposed the latest effort to switch from paper currency to dollar coins. That explains why the coins, 1.2 billion of them and counting, are stacking up in Federal Reserve vaults instead of finding their way in and out of our pockets.

But the mint keeps stamping them out, in accordance with a 2005 law that requires it to issue dollar coins bearing the likeness of all the dead presidents. That means the pile will keep growing until at least 2016 unless something changes. But what?

Sen. John Kerry, D-Mass., is sponsoring a bill that would halt production of dollar coins whenever there’s a surplus. (Sorry, Chester A. Arthur!) Massachusetts is home to Crane & Co., which makes the paper that’s used to print dollar bills. Kerry’s measure is supported by paper and ink manufacturers, the armored car industry, and the Mount Vernon Ladies Association.

Rep. David Schweikert, R-Ariz., meanwhile, is pushing a bill that would phase out paper currency, forcing Americans to use those dollar coins, which are made mostly of copper, one of his state’s biggest resources. His bill is supported by mining interests, transit agencies and the coin vending industry.

For the general public, you’d think it would be a matter of heads or tails. In daily use, the advantages and disadvantages of paper vs. metal are slight. Coins weigh more than bills, but they’re not oppressively heavy, and how many do you really need to carry around? If you want to purchase a soda from a vending machine, a dollar coin is less hassle than either a bill or a handful of smaller change, but again, what’s the big deal?

But the dollar bill isn’t going to go away by itself. Witness the lack of enthusiasm for Susan B. Anthony, Sacagawea and all those U.S. presidents. Canadians, though, love their “loonie.” Canada phased out paper dollars over two years after introducing the coin in 1987. Commerce was not upended.

Americans are funny about their money. A full 63 percent of those responding to the coin versus paper poll said they’d be less likely to support a candidate who favored replacing dollar bills with coins. Yet in poll after poll, they oppose getting rid of the penny, even though it costs nearly 2 cents to make and ends up left next to the cash register or dropped in a jar. Change is hard.

But this one’s overdue. Printing paper dollars is a waste of money we don’t have. Schweikert’s bill has found support among members of the deficit-busting “supercommittee” looking for $1.5 trillion in federal budget cuts.

A dollar bill costs 5.5 cents to make and lasts about three years; a dollar coin costs 31 cents and lasts 30 years or more. Switching from paper to metal could save $5.6 billion over 30 years, or $184 million a year, according to the Government Accountability Office.

Critics say the supercommittee is rummaging for coins in the couch cushions. We say do it. Since when is $184 million chump change?

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