Our nation is about to cross the threshold of $20 trillion of debt. This is an incredible sum. It is so large as to be essentially incomprehensible, but it is real.
Someone — in fact, lots of different “someones” — holds treasury notes which the American people, and especially our children and grandchildren, are on the hook to pay off. They will soon total $20 trillion.
The number is not going down. In fact, it is going up at an accelerating rate for many reasons, but primarily because of entitlement spending on the baby boom generation.
Thus as Congress and the administration look to save taxpayers’ money with a more efficient government, what better place to start than with the cost of money itself?
We are minting and printing money that is more expensive than the value it represents. The penny costs more than a penny to make and has for years. According to the U.S. Mint, it costs 2.4 cents to produce a penny. Now, that doesn’t make much sense.
Even a nickel costs more than a nickel to make. We print billions of replacement dollar bills year after year, when we could be using dollar coins that last for decades.
We need a currency modernization initiative. This does not mean a complete overhaul of our currency, which would be too traumatic.
It means moving incrementally to help pave the way for broad reforms which will save money and stop the foolish waste of the present system.
We need to change the system where a penny does not save us anything but simply costs us money.
According to currency experts, it is twice as costly to manufacture a dollar note as to replace it with a dollar coin.
Switching from the dollar note to the dollar coin would be a measured but effective step toward tackling our debt problem. If done alongside suspending the production of the penny and adjusting the metal composition of the nickel, such changes would generate up to $14 billion in savings to taxpayers.
Two-thirds of the American people get it. Once they are advised of the savings, they are behind it because it makes common sense.
The Government Accounting Office (GAO) has recommended changing to dollar coins in ten separate reports over 24 years. A bipartisan report, to be released soon, recommends similar changes and estimates savings that are even higher than the GAO’s. This is counsel to which the administration and the Congress should listen.
It is especially compelling when one realizes that America is one of the few industrialized nations still using paper currency for such a low denomination as one dollar.
We stand proudly with Argentina and Botswana.
In Canada, for example, the lowest bill denomination is five dollars. According to a 2011 GAO report, when Canada transitioned to a dollar coin, the Canadian government realized savings at a rate ten times greater than had been initially expected.
This seems like a “no-brainer” for the Trump administration and this Congress, which is looking for reasonably painless ways to save money for the taxpayer and possibly even reduce the debt — assuming, of course, that the savings do not get spent.
Making money for the taxpayers by going to hard money is one of those ideas that is so logical that it would jump the hurdle of partisanship which is stymieing so much of Washington today. It would pass with bipartisan support.
We could bet all our pennies on this.
Judd Gregg (R) is a former governor and three-term senator from New Hampshire who served as chairman and ranking member of the Senate Budget Committee, and as ranking member of the Senate Appropriations Foreign Operations subcommittee.
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