Death To The Dollar

         The news is buzzing right now with an idea that’s been thrown around: getting rid of the U.S. Dollar. The paper dollar has long been a staple of our economy. Backed by gold and trusted virtually everywhere in the world, the U.S. Dollar has proven to be a fundamental importance to the American way of life. Sadly, there are those within Congress and the Federal Reserve who feel that paper money is becoming a burden and have begun circulating the rumor that perhaps we’d be better off without it.
         As a way to reduce the deficit, the Federal Reserve has made claims that making paper money is expensive and a waste of tax money. (Disclaimer: The U.S. Dollar is not actually made from paper, but for the purpose of my post I am calling it paper.) The Federal Reserve minted billions of gold dollar coins. Most of those coins rarely see the light of day, being kept locked away in the Federal Reserve. The prospect of doing a little house cleaning has got the Reserve jumping on the bandwagon of trading in the paper dollar for the coin dollar. But is this really the best of ideas?
         We have all felt the annoyance of having a pocket full of coins and sitting down in our car and having that change fall out and get lost, never to be seen again. Change is hard to hold on to. It can slip out of your pocket and be lost forever on the floor of a movie theater or the cushions of a restaurant booth. Most vending machines are not designed to take the large, thick dollar coins, but most all of them have paper money slots. Wallets, purses, and envelopes are all designed to functionally hold, protect, carry, and utilize the dollar bill. Just the sheer weight of a coin versus paper money and the thought of carrying clanking metal in your pocket is enough to deter anyone from being interested in this.
         Bills are convenient. They can be easily transported or mailed. They make any transaction a breeze. And there is nothing better than cold, hard cash when making purchases or trying to haggle a deal. Just ask anyone at a garage sale, flea market, or pawn shop. Bills come in the most popular forms of a one, five, ten, twenty, fifty, and a hundred. So this begs the question, if coins replace the paper, will a separate coin be made for each bill? If not, imagine converting fifty one dollar bills into fifty one dollar coins. Doesn’t sound very pleasant does it? If they do make a separate coin for each bill, how would we differentiate them from each other and from the other coins already in existence? What materials would be used and what president’s image would be utilized? Another thing that will have to be considered is the dozens of other coins we have already. Pennies, nickels, dimes, quarters, half dollars, golden dollars, all of these will still, presumably, be in circulation. Anytime we make a purchase, we will get a mountain of coins back as our -quite literal- change.
         If you stop and think about it, it would seem that all the time, effort, and money spent on this project wouldn’t be worth the miniscule amount of savings that are being claimed by the committee. First off, you would have to initiate some sort of recall for paper money. The sheer massiveness of trying to round up and trade in every paper bill in the world can’t even be fathomed. It’s an impossible task. Secondly, assuming coins would be made for each bill, then entire committees would have to be assembled to design each coin. Then materials would have to be gathered and actual coins would have to be produced. Another lengthy assignment. Lastly, after the coins are made, you’d have to get them into circulation. Banks would have to be converted. Every single store in the country would need to have their bills swapped out for coins. Considering the lack of appeal and interest in the already minted dollar coins, this all appears to be an idea that most businesses and consumers would not be behind.
         Another problem with coins is that they can’t be verified or traced. Bills have serial numbers and authentication strips that show up under black lights. A consumer can go online and trace the origin and recent purchases used with a bill in their possession. Coins have no verifiable imprints and include no serial numbers. One would assume that counterfeiting a coin would be much easier than a dollar bill. How does the committee plan to accommodate this huge oversight?
         The smart idea would be to do away with coins altogether. Make every sale an even dollar and then we can all stick to paper. The coins can be kept for collectors and personal minters. Whatever isn’t preserved can be melted down and used for other purposes. With the rising cost of food prices a pocket full of quarters hardly gets you anything in a vending machine anymore. Most individuals use bills for vending machines. A lot of machines have now been retrofitted with credit card readers making physical money a thing of the past.
         Coins are the most primitive form of money. Ancient civilizations used crudely stamped coins, misshapen and no two alike. A stack of coins will take up more space, with less worth, then a stack of bills. The Federal Reserve will be hard pressed to find any citizen who is happy to go along trading a hundred dollar bill in their wallet for a hundred bronze coins in their pocket. It’s impractical and burdensome. The committee tossing this idea around has cited various numbers about how much money it would save the government in the long run. Meanwhile the government continues wasting billions on Homeland Security initiatives in order to control and document every citizen. Billions more are wasted on foreign aide and unsubstantiated wars. Trillions are wasted on failing businesses who wouldn’t know an accountant if one applied for a job as CEO. Looking to the fringes of unimportant issues to save money is not the way to fix the ever increasing debt of this country.
         Nothing vital will be earned by trading in paper bills for metallic coins. In the long run, it will prove to be a horrible initiative and a taxing change. The U.S. Dollar may be declining, but there’s little evidence that China will be more accepting of a physical coin over a dollar bill. It seems more like swapping out a flat tire with another flat tire. The real issue is not in the dollar itself, but in the economy it’s trying to fuel. The economy and the politicians with their hands in the piggy banks are the things that need swapped out and replaced. Switching from a paper system to a coin system feels like a cheap ploy to avert everyone’s attention away from the fact that regardless of what the physical currency is, the U.S. Dollar -and the government backing it- aren’t worth a damn these days.