Musings on Money
The unveiling of the designs for the "Presidential $1 Coin Program" has prompted some thoughts about the state of money in America, so I figured why not throw some random suggestions out there.
First, I like the idea of a dollar coin, since it makes so much more sense (not to mention cents) for the government to produce coins rather than dollar bills (they last a bit longer, not surprisingly). However, I think Kevin Drum is right in saying that if bills and coins are in circulation simultaneously, people will prefer bills (because they're used to them, bills are lighter, etc.). The solution seems fairly simple: ditch the dollar bill. People will then use the coins (plus, George Washington already has his mug on the quarter so there's no need to worry that he will go unhonored).
Now, as to the particular dollar coin project the Mint's embarking on in 2007, it certainly seems to have some merit. The state quarters have been immensely popular, and while some of the quarters have gone into collections, they have saturated the market enough that everyone's using them instead of hoarding them (as many people - including me - still do with the current dollar coins). Having a presidential series will prompt collecting as well, but if the Mint pumps out enough coins to get them really circulating, people will use them (something which will be guaranteed if the dollar bill goes away). The new coin design is interesting and fresh (check out the edge design), although I hope the reverse ends up looking slightly less like board-game money.
Of course there is the odd problem of what to do given the Mint's proposed four-presidents-per-year schedule, since when 2017 rolls around there's a decent chance that Bill Clinton and/or George W. Bush and/or Bush's successor will still be alive (and the law says no living ex-president or current president can appear on the coin). I guess the Mint's planning to cross that bridge when we get there.
Now, you'll say, there's a problem with dollar coins: they don't fit nicely into cash register change compartments. That's true, and again there's a fairly simple solution - abolish the penny. It is an obnoxious anachronism whose moment has long since passed. Plus, again, Lincoln's already got the $5 bill so he's covered. Satiate the copper and zinc proponents by using their metals in some other way.
But now that we've gotten rid of the dollar bill and the penny there's an extra slot in the register's cash compartment. Ah, the perfect opportunity to revive and increase circulation of the $2 bill, which would then save the trouble of ever getting three or four dollar coins in change. Keeping Jefferson on the $2 bill would open up the nickel for a new face, and I would nominate Teddy Roosevelt to go there (because really now, how long can we possibly continue to ignore the fact that TR's not honored on a coin or a bill?).
So, in short:
- Stop producing pennies and one-dollar bills.
- Increase circulation of one-dollar coins and two-dollar bills.
- Put TR's image on the nickel.
Other things to consider:
- What goes on the quarter after we run out of states?
- What goes on the dollar coin after we run out of ex-presidents?
Just my two cents.