When I was in Germany back in the mid-90s on an Army base, the U.S. Army had already figured out that it was a waste of money flying sacks of pennies back and forth across the Atlantic on military transports–so they got rid of the penny for the overseas PXs.
It worked fine. Prices that ended in 1 or 2 cents rounded down. Prices that ended in 3 or 4 cents rounded up. If you paid by credit card, you kept it exact.
Since, according to that article, nickels are the real problem, clearly what we should do is eliminate them. This will be much harder to oppose, since it won’t force anyone to round transactions. Once the nickel is gone (and maybe the dime, too) no one will care what happens to the penny.
I also rather like the idea of making all existing pennies worth 5¢. Would anyone lose out with this plan?
That’s what the practice has been here since the one and two cent coins were discontinued in 1991. Electronic payments, of course, are still carried out to the exact cent.
I am constantly amazed by so called fiscal conservatives who refuse to quit minting the penny and printing the dollar bill. Fiscal conservatives cannot seem to realize that an action can become fiscally untenable.
You know what’s a really great way to teach addition and subtraction to kids? Money. Pennies, dimes, and dollars. It’s easy to teach borrowing, carrying, and all sorts of arithmetic if you’ve got a jar of coins and a few dollar bills. For larger sums, play 1s, 10s, and 100s come in handy.
I’m just saying, is all.
In and of itself, so what? If all we cared about was getting the best “return” on our minting expenses, we’d do nothing but pump out hundred dollar bills. Clearly, that’s not the goal of the mint.
There might be concerns regarding selling pennies for more than their face value in light of their commodity value as metal or such. But this is a slight step beyond, and even a little independent of, simply the fact that it costs more than their face value to manufacture them, and I think it’s glib to automatically conflate the two.
Getting rid of the penny, just because today it costs more to make then it is worth, is very short sighted. What if the cost of Zinc falls over the next 5 years? What if it costs 1/10th of a cent to make a penny in 10 years?
If you want to get rid of the penny, do it because of its insignificant value with respect to the other denominations of currency, not because of the price of the metal it is made of.
Make it worth five cents? Are you serious? What are the manufacturers of those little red “Take a Penny/Leave a Penny” dishes supposed to do to avoid going out of business, start printing “Take a Nickel/Leave a Nickel” on them?
Never happen. Massive unemployment on the horizon.
Slight hijack, but does it ever become legal to destroy coins? For example, if I expect metal prices to go up in the future, could I stock up on pennies and nickels and smelt them down later for profit?
The problem isn’t fiscal conservatives, it’s the groups that have a vested interest in maintaining the status quo, like the zinc industry.
It is one of the goals of the mint. See seigniorage. It’s a substantial source of revenue for the government.
I beg to differ. Fiscal conservatives are big on cutting social programs but still loath to end the more expensive capital punishment over the more expensive life imprisonment.
Haven’t done the numbers but I wonder, in keeping with the OP, how much money would be saved by scuttling dollar bills and pennies to be replaced with the dollar bill which the vending and amusement industries have been lobbying for many years for.
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Whatever they do, they need to have a coin (or bill) for the lowest possible monetary denomination. This rounding crap is out of the question. If they want to make a dollar worth 20 ‘nickels’ so be it. But if they want to keep a dollar worth 100 cents, damnit, I want to be able to spend a single cent if need be.
A dollar isn’t worth 100 cents. A dollar is worth a dollar and a cent is 1/100th of a dollar. There’s nothing preventing the smallest denomination being 1/4 of a dollar or 1/10th of a dollar.
The reason the dollar coin doesn’t catch on is twofold. One, we haven’t gotten rid of completely worthless coins like the penny and nickel, so you wind up with even more coinage than before. Two, the dollar coin doesn’t, by itself, eliminate the need to go to your billfold for most of your purchases.
Adding a dollar coin means you have more coins in your pocket, and still usually go to the wallet for a $5 or $20 to pay for things. If you did currency right, you’d have a quarter, dollar and $5 coin, and only $10 and above bills. You cut down on the number of coins in circulation, and make it so that one can actually purchase something with a coin, rather than having them simply “change” that must be collected and “cashed in” once a month.
This is an excellent idea, and I agree completely- especially the part about making it a legal requirement that prices include all applicable taxes (this always drives me mad when I visit the US!)
The simple fact of the matter- as I believe was mentioned in another thread on the same topic- is that a Penny can’t buy anything meaningful anymore, and therefore has no use as a coin. True, 5c and 10c won’t get you much either, but they are still useful as the component parts of a dollar amount; the 1c piece adds nothing but extra weight and more coins to deal with.
I find it ironic people here on the boards continue to bemoan the adoption of $1 and $2 coins as meaning they’ll need “coin purses” or “extra-strength pockets” for the weight of all the additional coinage they’ll have to carry, all whilst completely missing the point that Americans already carry more coinage that most other countries because of all the 1c pieces they refuse to give up.
I’ve said it before and I’ll say it again: $1 and $2 coins are an eminently sensible and worthwhile idea, and once you guys ditch pennies and $1 notes in favour of them you’ll wonder what all the fuss was about.
They are less useful than other coins, because vending machines don’t take them. And I’m too nice to want to tie up a checkout line by counting out pennies, and too bad at doing arithmetic in my head to calculate what things will cost with sales tax so I could count out pennies ahead of time. Pennies are useless to people like me- all they do is accumulate in my bag and make it heavier, and sometimes the accumulation of pennies makes the airport security people hassle me.
Gee, would you like a bigger brush?
Fiscal conservatives are not required to turn in their secret University of Chicago decoder rings if they oppose capital punishment.
I’m all for getting rid of everything below $1 and making that the lowest denimination of currency. And if we did that, I’d also be fine with ditching the $1 bill and replacing it with a coin.
Gee, I remember when we had mills, or one tenth of a penny. The mills were made out of paper, still got some of those things. I wonder if I could trade 10 of them for a penny? Maybe make pennys out of paper.
So what? That’s just a psychological milestone, isn’t it? I don’t think the gov’t is stamping out pennies to make a profit from them, but simply because we need pennies.
I could have sworn there was thread about this recently, that I may have even started myself, but I cannot find it.