I’ve seen arguments that the US should follow the example of many other countries and rely more on coins for day-to-day transactions. In Europe, for example, the smallest paper bill is the €5, which is worth about $7.50. Seven and a half times the value of our smallest note.
We could eliminate the $1 and $2 bills (as well as the penny, nickel and dime, but that’s another thread), and introduce a $2 coin. Hell, if we really wanted to be progressive, we could also eliminate the $5 bill, and introduce a $5 coin.
My gut feeling is that this would be a good change*. But I have trouble articulating just why this would be good. I can only think of one objective reason: in the long run, it must be cheaper to mint coins than print bills. A $5 coin would last for 50 years, but a $5 bill must be destroyed and reprinted every 18 months or so.
But there are also subjective reasons that are harder to articulate. When the currency system was conceived, you could get through your day-to-day spending without ever pulling out a paper note. You could buy a meal, pay for a haircut, hire a taxi, etc. without ever using paper money. That feels like a better system to me. Is it?
What are the arguments in favor of basing more of our (Americans’) day-to-day transactions on coins? Arguments against?
*No pun intended. I swear to god.
Old threads on similar topics:
One and two dollar bills? or coins?
New $1 coins - here we go again!
How would you redesign American currency?