The United States has always been a leader in currency innovation — from Thomas Jefferson's vision of uniting a nation under one currency, to becoming the global monetary standard for nearly 100 years. Today we have an opportunity to save taxpayers billions of dollars with three simple changes in the way we make money.
As two former U.S. Mint directors, who represent neither side of this issue, we know that if Congress is serious about balancing the budget and reining in excessive spending, it should pass the Coins Act, a bipartisan plan for currency reform that would transform our money to meet the requirements of commerce in the 21st century. This is not a partisan issue — that's why we, a Democrat and a Republican Mint director, agree — the Coins Act takes an approach both sides can agree on.
The United States is one of only three industrialized nations, along with Argentina and Botswana, that still use low-denomination paper bills rather than high-denomination coins. The United Kingdom, Canada, Japan, European Union currency union members and dozens more nations save tens of millions each year from modernizing their currencies. They have proved that the switch is easy and consumer-friendly — and, most importantly, it reduces government waste.
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Billions of taxpayer dollars are being wasted with our outdated currency system, while the government struggles to pay its bills and adds to an already enormous national debt. That is why we must get smart about money and modernize our currency.
The three commonsense currency reforms in the Coins Act — switching from the dollar bill to a dollar coin, changing the composition of the nickel and suspending production of the penny — could save taxpayers up to $16.3 billion, according to recent estimates by bipartisan economists.
The production costs of the penny, nickel and dollar note are excessive and reflect an antiquated and atrophied currency system. Each penny costs 1.4 cents to produce, amounting to a loss to taxpayers of $1 billion over the next decade. And the nickel, due to its costly composition, has wasted nearly $367 million over the last 11 years.
We all know that a dollar isn't worth what it used to be. In fact, today a dollar has the same purchasing power that a quarter had in 1975. And spending power isn't the only problem with the dollar bill: The average dollar note is shredded and trashed after just a few years in circulation — 3.2 billion dollar bills are removed each year, adding more than 7 million pounds of waste to landfills. Dollar coins, on the other hand, have an estimated lifespan of 34 years.
American voters support these changes. Recent polling shows that nearly 70 percent of Republicans, independents and Democrats alike support switching from the dollar note to a dollar coin when informed of the taxpayer savings.
Thought leaders from business executives and former top U.S. Treasury officials to editorial boards spanning the country all have advocated for currency reform and the benefits it will bring to consumers and taxpayers. And in 10 reports issued over more than two decades, the nonpartisan Government Accountability Office — Congress' budget and financial analyst — has supported currency reform, describing in detail the billions in taxpayer savings that would come from common sense currency adaptations.