Smart Money

Yesterday, the United States Mint announced plans for the issue of a new dollar coin. The head of the coin will feature a series of U.S. presidents -- four each year -- while the tails side will display the Statue of Liberty. The coin will have the same dimensions as the Sacagawea dollar, which will, quite puzzlingly, continue to be minted, and it will have the same metallic signature as the Susan B. Anthony dollar, meaning that all three types of dollar coins will be interchangeable for the purposes of vending machines. In a welcome break from tradition, the value of the coin will appear as "$1," rather than being written in text, allowing non-English speaking visitors (and, um, "residents") to immediately comprehend the value, rather than being forced to decipher a language they don't understand and then wonder how many cents "One Dime" is worth. Most of the statutorily-prescribed language ("E Pluribus Unum," the date, the mint mark) will be transferred to the edge of the coin while the Statute of Liberty serves as an appropriate allegory for the word "Liberty."

The Mint believes that it has addressed the problems that made the public reluctant to accept the previous dollar coins. Between the comprehensive marketing campaign they plan to unveil and the collectible nature of 37-plus issues of coins, the Mint expects the circulation of the coins to dwarf its predecessors. But there's really only one good way to ensure the coins' success: discontinue the dollar bill. Yeah, the greenback is a great American tradition, but it's a horribly inefficient one. Do away with the dollar bill and you can do away with those annoying bill readers on vending machines that require a pristine bill to be inserted just so. Many vending machines and virtually all transit systems with fareboxes cost more than a dollar. Have you even been behind someone waiting to get on a bus while they struggle to get their dollar bill accepted in the reader? Coins can be counted by machine whereas bills need to be straightened out, sorted, and collated largely by hand. Coins also last for a much longer time than small-denomination bills that get passed around frequently, making them a better value for the government to produce. And like the state quarters, which are fun to collect (or at least check to see which ones you got as change -- it never gets old!), 37 different types of coin are much more fun than just one.

Of the 29 countries I've visited, only three of them, besides the U.S., still print bills for their unit currency: Turkey, Uruguay, and Jordan. Even the economic backwater of Egypt has gotten with the program and has discontinued its one-pound bill for a coin. Some countries use coins for their two-unit currency (e.g. Canada, UK, Euro Zone) while a few even insist on coins for their five-unit currency (e.g. Switzerland, Japan). It makes so much more sense from an economic and efficiency standpoint.

Here's my modest proposal: Scrap the greenback in favor of coins, but reinstate the two-dollar bill (which technically never went away), so that you don't get stuck with seven monstrous coins when your $4.99 sandwich gets rung up as $5.24 with tax. It's time to get over our typical American obstinancy and do something that makes obvious sense. Now, about that pesky penny....