I realize this is a very old thread, but it was republished today as an SD Classic.
I have to wonder about this:
“The mint makes something like 13 billion pennies a year, accounting for two-thirds of all U.S. coinage. Half of these pennies will disappear from circulation within a year, having been squirreled away in penny jars and who knows where else.”
Really? Over 6B pennies per year disappear? It goes on to say:
" The U.S. General Accounting Office estimates that of the roughly 170 billion pennies currently in existence…"
Unless the volume of penny production has mysteriously ramped up VERY significantly in the last few years, that 170B seems low if 13B per year are created. Maybe the 13B should have been 1.3B? That would make sense…
“But competitive pressures are likely to keep most retailers honest,** and in any case the amounts are trivial**.”
'Tis to laugh.
If it’s trivial, how come the oil industry tacks on that “.9” at the end of the price of each gallon of gas? Ever notice that we hardly, if ever, think about it and yet it amounts to a huge additonal cost to the comsumer and a huge profit to those who already make more money than the rest of us put together?
One penny added to the price of a commodity that sells in the hundreds of billions adds up to billions in profits.
Being one of those who still uses actual money instead of plastic cards to buy things, I’m carrying pennies in my pocket all the time and using them every day. Without them is there any doubt that “honest retailers” will always round up, not down, ensuring a neat, hidden profit?
If the penny is costing too much to produce, how about making them out of plain old iron or plastic to keep the cost down. We’d still have them and that way, when they wear out, they could be recycled into new pennies.
Coins lasted longer in circulation before 1964. When I was a kid in the 1950s, it wasn’t all that odd to get an Indian-head cent in change, which was last minted in 1909.
Canada got rid of its pennies a while ago. The very large majority (I don’t want to say “all” in case someone challenges me) of retailers that I’ve dealt with since then round properly (i.e. down for 1 cent and 2 cents, up for 3 cents and 4 cents). Our cash registers are programmed to do it.
Note that rounding is done on the total purchase not the individual items, so unless you buy things one at a time it doesn’t make a lot of difference whether proper rounding is done or not.
“Huge additional cost”? If gas is, say $3.50 a gallon and you charge $3.509 the difference is about 0.25%. No one is buying gold-plated, diamond-studded kevlar condoms with 0.25% increase. Especially since a price of $3.509 is possibly going down from 3.51 ratherr than up from 3.50.
Also, “plastic” money is the best way to “keep them honest”. They can never round up or down.
Say what now? There’s no need for a mill coin to set a price to the tenth of a cent. Nor indeed to nine-tenths of a cent, which is standard practice at gas stations in the US. They run it at that price ($3.499, f’rinstance), then round the total.
Maybe mentioned in the original thread, but there has never been a US penny. It’s a cent. Try selling an old ‘penny’ to Rick Harrison from Pawn Stars and he’ll bring that up.
It’s the zinc lobby. The copper lobby is anti-penny, as the penny has the smallest amount of copper of any coin. (The nickel is 75% copper compared to the penny’s 2.5%.)
They were talking about getting rid of the penny back in the 1960s, when the penny had more than 20 times the purchasing power that it has now. In other words, we should be talking about getting rid of the quarter dollar. The penny is now worth less than a tenth of what the half-penny was when it was discontinued.
We have two choices of any practicality – create a new, uninflated currency (a ‘new’ dollar) where all your old dollars and coins are replaced by a dollar that really means something. If we go back to where $20 was worth more than an ounce of gold, then Treasury should issue one new dollar for every 80 old dollars. The dollar used to represent the standard pay for a day’s labor. The new dollar would be worth about half that much, so no one would be working for a dollar a day, but I see no problem with minimum wage being set to $2 a day (or about the equivalent of $20 an hour in today’s currency.)
Of course, the initial paperwork cost would be in the billions. Knotheads would attempt to sue to try to get contracts stated in old dollars paid with the same number of new dollars. But other countries have successfully replaced their hyper-inflated currencies. Surely, a nation with the technological might of the United States ought to be able to manage it. Also a lot of people would feel ‘poorer.’ Apparently, much of the American public would rather have a million dollars of worthless Monopoly money than, say, ten thousand dollars that could actually buy something. On the plus side, the media would finally stop complaining about those billionaires.
The other choice would be to get rid of coins altogether, rounding all transactions to the nearest dollar. And soon, even the single dollar would be obsolete. We are entering a world where a fifty cent hamburger costs ten dollars. We managed to get along without half-pennies when a hamburger cost fifty cents. We could also live without the dollar if we really wanted to.
when I was a kid the pumps had a sign saying that the price included _.9 a gallon tax. So I always figured some taxing entity was responsible for the .9 not the retailer
Most cash purchases in the U.S. already involve rounding up or down, since most involve state or local sales taxes with odd fractional values. Say I go to a store, and buy something priced at $1.00 even, I generally can’t expect to pay with a dollar note: there will be a sales tax at some odd rate like 6.75% or 7.25%, and in each of those cases I will be paying $1.07. That’s an amount rounded to the nearest cent, after totalling the purchase and adding sales tax.
If the US abolished the penny, the only difference would be that the purchase would be rounded to the nearest 5 cents, and not just to the nearest cent, if you’re paying with cash. (If you’re paying with a credit card or debit card, the transaction can remain rounded to the nearest cent as it is now.)