United States could save billions by eliminating 1-dollar note

According to a US Government Accountability Office report dated 4 March 2011, the US could save $5.5 billion over 30 years by replacing the 1-dollar banknote with a coin because coins last longer in circulation. This is the fourth time the GAO has made this recommendation in the past two decades, and I doubt this latest recommendation will be adopted even in these difficult economic times as no politician wants to be the one to authorize the euthanasia of hte iconic dollar bill with George Washington’s familiar face. Plus the difficulty in getting US citizens to use the 1-dollar coin dates back to the ill-fated Susan B. Anthony dollar. First issued in 1979, the coin was roundly rejected because it was too close in size, shape, and color to the quarter, resulting in confusion during transactions. The Sacagawea dollar issued in 2000 partially solved the color simularity by using a clad which appears “golden” when new, but tarnishes to a dull color after circulation.

It’s unlikely the public will ever choose the coin over the note if both circulate simultaneously, but if the notes were withdrawn, the public would eventually adopt coinage, just as has happened in many other countries around the world that finally faced up to the financial fact that it made little economic sense to lose money on every dollar it prints instead of mints.