Greenback Coin: More Trouble Than It's Worth
The editorial ''Coin Toss,'' May 8, stated that the government would save up to $395 million a year because coins last longer than paper. But the Congressional Budget Office says that these production savings would amount to only about $20 million a year -- and that's only if the coin works. The $395 million figure comes from a highly discredited government accounting technique called ''seigniorage,'' whereby the government sells coins to itself, thus artificially reducing the size of the national debt. United States Mint director Philip Diehl recently told Congress that switching to a mandatory $1 coin would actually cost the government $22 million over the first five years.
The prices of vending machine products are also sure to rise. According to industry figures, about half of all vending machines will have to have a $2 bill acceptor added, and every machine will have to have a new ''tubing'' device added so that machines can not only accept the $1 coin, but give it back as change.
These modifications will run about $2.7 billion, according to the nation's second largest manufacturer of coin and bill acceptor devices. Do you think these costs will be passed on to the consumer, or absorbed by the vending companies?
David Ryder Washington
Former director, US Mint