Why Do Americans Cling to Dollar Bills?

By Samuel Goldman • December 4, 2012, 11:03 AM

For the sixth time in 22 years, the General Accounting Office has released an analysis of the benefits of replacing the dollar bill with a coin. As it has in the past, the GAO reports that the government could save a lot of money by making the switch. The problem is that Americans hate the idea. Previous efforts to introduce a dollar coin–the Susan B. Anthony Dollar (1979), Sacagawea Dollar (2000), and current Presidential Dollars (2007)–have all been failures with the public.

Retailers who handle a lot of cash have a reason to dislike coins, which are bulky and heavy in large quantities, and therefore expensive to transport. But I can’t understand ordinary people’s loyalty to the dollar bill.

For one thing, paper money is filthy. In a society in which hand sanitizers are a nearly $200 million business, you’d think that people would appreciate a cleaner alternative. Paper money is also a bother to carry in small denominations. Men’s clothing, at least, has no good place for a wallet bulging with singles.

Defenders of the dollar bill sometimes point out that few vending machines accept dollar coins. But they don’t accept damaged bills either. And paper money is extremely fragile.

I admit to being peevish about this issue: I spent a good deal of time last night changing singles for quarters and feeding the quarters into machines at the laundromat. But I really can’t think of any argument for retaining the dollar bill that doesn’t boil down to the observation that people like it better for reasons that they can’t quite articulate. At The American Conservative, we consider reluctance to change to be a virtue. In this case, however, we’d better off if we could overcome that conservative disposition.

Posted in America, Economics. Tagged dollar bill, dollar coin, GAO.

30 Responses to Why Do Americans Cling to Dollar Bills?

Dakarian says:

December 4, 2012 at 11:16 am

I’m very much in favor of them. It just seems like you don’t see many companies carrying them. Myself, I get dollar bills from banks, if I ask for small bills, and from stores when I pay with cash. As such, I don’t have much say on what types of bills I get (otherwise, I’d have a lot more state quarters and perhaps some of the older 5 dollar bills). If every store gave dollar coins as change, I’d be holding nothing but coins. Since none do, I have none. I think a lot of Americans are in the same boat.

So, I’d say, get the retail and fast food places to adopt the coins, and everyone else will follow.
ChacoKevy says:

December 4, 2012 at 11:31 am

My objection to coin dollars are the same as retailers: having, say $10, of single bills is more convenient than the same quantity in coins.
When do you ever have a wallet bulging with singles? Wouldn’t you worry just as much about developing a limp from all that extra weight on one leg from all those coins in your pocket?
Red Phillips says:

December 4, 2012 at 11:34 am

So there are good places in men’s clothing for several bulky dollar coins? That is the problem with dollar coins: they are too bulky. No man wants a bunch of coins clanging around in his pocket, when he could have a few bills tucked away in his wallet instead. For the sake of neatly falling trousers, save the dollar bill!
Chris Mallory says:

December 4, 2012 at 11:57 am

Because you can’t slip coins in a stripper’s g-string.
Punditius says:

December 4, 2012 at 12:05 pm

Men like paper money because it can be displayed, generally as a “wad” with the large bills on the outer layer.

Women dislike coins because they add weight to their purses.

Both prefer paper because it is easier to handle.

In addition, paper money makes you feel like you have more cash than an equivalent in coins.

Coins are just as dirty as paper.
Sumeet says:

December 4, 2012 at 12:12 pm

Planet Money recently did a story on this. Basically, it comes down to Seigniorage and paper money comes on top.

http://www.npr.org/blogs/money/2012/11/30/166253822/episode-364-should-we-kill-the-dollar-bill
Alex E says:

December 4, 2012 at 12:25 pm

I thought this Planet Money podcast made sense:
http://www.npr.org/blogs/money/2012/11/30/166253822/episode-364-should-we-kill-the-dollar-bill

If I have coins, I put it in a jar. But, if I have notes, it is usually in my wallet. Nowadays, of course I mainly use debit and credit cards (its easy to track), and I use bills and coins, mainly, to give to panhandlers.
Don Quijote says:

December 4, 2012 at 12:41 pm

Why Do Americans Cling to English measurements instead of Metrics?

Why Do Americans Cling to Fahrenheit instead of Celsius?

Why Do Americans Cling AM/PM instead of a 24:00 clock?
Cliff says:

December 4, 2012 at 1:18 pm

Why do dollar coins have to be big? Seems to me that that’s a design choice. Get rid of pennies and dimes, and that’ll open up space for small dollar coins.

I rarely carry either bills or coins. They’ve been replaced by my debit card. I do have a twenty in my wallet right now to purchase quarters the next time I go to the laundromat. And I can’t buy a bus ticket with a debit card. Or pay my rent. But the debit card covers most things.
Janis Gore says:

December 4, 2012 at 1:46 pm

The recent sizes of the coins makes confusion with quarters.
hetzer says:

December 4, 2012 at 2:01 pm

Maybe there is something to the oft-repeated claim that Americans are inherently conservative.

Just not the “something” that Conservative, Inc. means.
chipotle says:

December 4, 2012 at 2:29 pm

It looks like Goldman’s been fooled by the hand sanitizer scam.

(Dollar bills won’t make you sick. Touching the door handle on the way out of the men’s room is OK, too.)
john personna says:

December 4, 2012 at 2:51 pm

To me it’s a litmus test. Are Americans who decry the deficit willing to bear a bare minimum burden (literally) to reduce it? Sadly, the answer is now, we are a nation of wimps. (As I’ve noted elsewhere, we do this while scoffing at those Canadians, who manage to carry their Loonies without hernias.)
Ellery Klein says:

December 4, 2012 at 3:45 pm

I just never understand why they have introduced coins while keeping the bill, and then complain that no one uses the coins. If you get rid of the bill entirely and make the coin ubiquitous, I guarantee that people will complain for about twenty five days max, and then use the coin like nothing ever happened, and the US government will save millions of dollars a year not having to reprint dollar bills that fall apart.
Matt says:

December 4, 2012 at 3:57 pm

“Why Do Americans Cling to English measurements instead of Metrics?”

Because they are greatly superior.

On topic, the benefits of switching to coin dollars are pretty abstract and diffuse, so it’s no wonder that most people don’t want to rearrange their thinking for it. I figure we’ll get rid of cash entirely before we get rid of paper cash.
JohnO says:

December 4, 2012 at 3:59 pm

It’s not just the weight – its the potential to lose/forget coins. I constantly lose coins – they fall out of my pocket, there’s no good place to put them when I empty my pockets. Bills I can put in my wallet. Coins I cannot. And the further we get in the swipe-the-card-age the less people are using even cash. They’re certainly not going to adopt coins.
Lambic Head says:

December 4, 2012 at 4:02 pm

Not sure why American men scoff at the idea of wallets with change purses; I converted after being in Europe.

It makes it easier in the long run–i.e., if something costs $5.07 after tax, you can hand over $20.07. I never have more than a few coins at once, and never have to use CoinStar or anything like that.
CD File says:

December 4, 2012 at 5:21 pm

I would be happy if they weren’t made out zinc and didn’t resemble quarters.
Richard M says:

December 4, 2012 at 5:58 pm

Neither paper nor coin is worth its face value, so I’m indifferent.
libertarian jerry says:

December 4, 2012 at 6:31 pm

Its amazing how over the years paper receipts for real money,that is gold and silver, has become money. Of course you can’t endlessly print gold and silver but you can endlessly print all the paper receipts you want eventually making the receipts worthless. When the paper receipts collapse and won’t buy anything anymore then the American economy will collapse just like a cheap suit.
Mark in LA says:

December 4, 2012 at 9:00 pm

Why, because when you put them in a strippers’s bra or panties, they tend to fall out and roll around on the floor especially when they swing upside down on the pole.
Informant says:

December 4, 2012 at 10:27 pm

Ellery Klein hits the nail on the head: the real problem is that the US insists on trying to introduce dollar coins while keeping dollar bills in circulation, with the result being that merchants, vending machine operators, etc., have no incentive to convert to using dollar coins. Every country that I’m aware of that switched from bills to coins for small denominations did so completely: bills were no longer printed at all after the coin was introduced, at most bills were allowed to remain legal tender for a few years to let them clear out of circulation, while in some cases people were required to exchange their bills for coins within a relatively short window of time.
William Dalton says:

December 4, 2012 at 10:45 pm

I thought decades ago it was time to revalue the dollar and issue one new dollar for every ten old ones, moving the decimal over one place. Ideally, the switch would have occurred in Y2K, making it easy to remember whether transactions had been conducted in old dollars or new.

But whenever it occurs, the new dollar bill will be worth (for awhile) today’s $10.00 bill. And is purchased today for $1.00 or $5.00 will be paid for in new dimes and half dollars. No one will give it a second thought, and we will grateful we can use vending machines again without having to pump it with seven or ten coins to make a simple purchase.
B. Minich says:

December 4, 2012 at 11:08 pm

I really really want to like coins over bills. One of my favorite parts of traveling is only dealing with bigger denominations. Love me my one £ coins. But Planet Money is pretty persuasive.

The fact is, our paper money lasts a long time. Long enough that the savings coins provide is negated.
Carl says:

December 5, 2012 at 4:39 am

The Treasury Department is a mess. Back in the 90s, they let some idiots take our money from being the classiest in the world to being the trashiest in the world. The old “greenback” is now the peach and purple hologram tissue. The 1976 quarter was nice… because it was unique. Now every day’s a holiday and even Guam gets a quarter. There’s a purple, Helevetica 5 on the five dollar bill for crying out loud!

A few simple steps to sanity:

- Stop printing dollar bills. Stop printing five dollar bills.
- Bring back the Sacagawea. It was a relatively classy coin, and she deserved the honor. If it can’t be her, then Harriett Tubman. Or since Lincoln is already on the penny, put Washington on the $1 coin and a notable woman on the $5.
- Stop minting pennies. It’s money losing madness.
- Make nickels smaller than dimes, for crying out loud. I’ve had to explain this to foreigners before. It wasn’t pretty.
- Require stores to display prices both with and without sales tax and to round down by the nickel.
- Make larger bills larger and smaller bills smaller to help out blind people. Probably longer lengthwise would be enough.
- Stop revising the currency every five years. Pick a nice, simple design and stick to it for at least a decade if not three. Don’t make it look like a Microsoft software license seal. Do make it look like the old money but with a few understated touches.
Robert Pinkerton says:

December 5, 2012 at 6:43 am

Paper money gives the illusion of being more valuable than coins, which are common change.
G-Diddy says:

December 5, 2012 at 7:50 am

“‘Why Do Americans Cling to English measurements instead of Metrics?’

Because they are greatly superior.”

Americans are greatly superior, or the measurements? Or both?
john personna says:

December 5, 2012 at 9:03 am

I have not listened to that Planet Money but generally respect them. I can’t believe though that they have suddenly been the only people to think of something not considered by the GAO, in 6 studies, over 22 years. tl;dr: I respect the GAO even more than Planet Money
Polichinello says:

December 5, 2012 at 9:03 am

I’m pretty indifferent, but the claimed savings are something like $4.4 billion over thirty years–Imagine Dr. Evil saying that, pinky to mouth–One. Hundred. and. Forty. Six. Million. A….Year!!!! If you’re worried about cost cutting, there are a lot of bigger fish out there to fry.

Previous efforts to introduce a dollar coin–the Susan B. Anthony Dollar (1979), Sacagawea Dollar (2000), and current Presidential Dollars (2007)–have all been failures with the public.

How about just transferring Washington’s image to the new coins instead of all this stunt minting–which is best left to oddball coins, like the 50 cent piece?
Tom Blanton says:

December 5, 2012 at 10:44 am

Since when does the government care what citizens prefer? I suspect that if the government stopped printing dollar bills, people would stop using them and start using the dollar coins.

However, if the government really cared about how much is spent on printing dollars, or minting coins, the legal tender laws could be repealed, allowing competing private money that would cost the government nothing.