This benefit, which GAO estimated using an economic model based on a set of assumptions, was entirely attributable to "seigniorage," a term defined as the difference between the cost of producing coins or notes and their face value. Seigniorage reduces government borrowing and interest costs, resulting in a financial benefit to the government. As GAO noted, the estimated net benefit could increase or decrease with changes in the assumptions.Up north, the Canadian government recently switched from the dollar bill to the dollar coin and found it saved 10 times more than it had originally estimated. Will the U.S. government embark on a similar course? It's not likely, given the lack of demand for a dollar coin from the ultimate decision-makers, the U.S. taxpayers. But that, apparently, is not going to stop the GAO from trying.
Why the GAO Still Wants a Dollar Coin
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