About as likely as bringing back the gold standard, legalizing marijuana and opium, and inventing warp drive.
I like the idea though. However, it’s not really hundreds of years of inflation you have to worry about. Until about 40 years ago, weren’t periods of inflation generally cancelled out by deflations?
Since the US dollar has a similar value to the Euro, which was only established quite recently, I don’t unbderstand why it’s not a manageable size. With inflation, the US could first eliminate pennies, then eliminate nickels and dimes (so that every price would be to the nearest quarter), and finally quarters. As part of the process, some paper money could be replaced by coins.
The basic unit of Japanese currency, the yen, is roughly the same value as the US cent. It is theoretically divided into 100 sen, but there are no coins smaller than 1 yen. The Japanese don’t seem to find this a problem, or want to revalue their currency.
I get the impression that the Department of the Treasury is very proud that they haven’t devalued the dollar. I found this statement on the moneyfactory.gov website, based on which I think that they’ll avoid doing as long as possible.
As an even more extreme case, before conversion to the euro, Italy was using the lira which was about twenty to a US penny at the time of changeover. They were managing to get along with the idea that one could spend four figures on an ice cream cone, and the smallest denomination note was 1000 lire.
It’s a pity that we have the quarter. If our coins were $0.10, $0.20 and $0.50 it would be easier to simply drop one decimal place. Jefferson wanted to have twenty cent pieces. Congress favored a $0.25 coin which would be equivalent to two Spanish reales (two bits, a buck is a byte?), as Spanish coinage was in widespread use at the time. Our only experiment with twenty cent pieces in the 1870’s was under strange circumstances which doomed the coin to be one of the most unpopular ever minted.
Note that the US mint also made half cents at one time. The Republic did not fall when they decided those were too small a denomination to be of practical use.
I can pretty much guarantee you merchants would scam people to always round up.
The only way around this is to sell everything at price and then have the merchant BACK the taxes out.
No one is gonna shop with a calculator to make sure they aren’t being cheated out of 2¢ but even 2¢ adds up over thousands of customers per day.
I have dealt with cash, I don’t see the big deal with leaving the penny as is.
The one issue I can think of is postage stamps. Would we immediately see an increase of postage from 39 cents to 40 cents? And would postage increases now have to come in increments of 5 cents, rather than the one to two cents we’ve been seeing? Would that mean postage increases would be more rare, or just larger?
Ed
It is possible to have stamps in fractional values, e.g. some of the transportation coils had values like 4.9 cents, 9.3 cents or 16.7 cents. It just means that you have to buy 5 or ten of them at a time.
What if you went to a post office and wanted to buy just one stamp, for instance if you had to send one letter to a foreign country and you rarely do that? Right now there have definitely been times when I bought just a 63 cent stamp to send a letter to Canada, for example.
Just thinking about the few times when I still buy items priced to the individual cent, where the cents makes a difference.
Ed
They don’t mint Mil’s (1/10th of a cent) which is a legal denomination. They just round the prices to the nearest cent, excpet in gas satiosn, where you are still charged in rounded cents anyway. Thus, they’d just do the same up to 5 cents.
I don’t understand why this is such a bid deal. Not too many (there’s always a few) dudes complained that the Gov’t didn’t mint Mils and Milrays back in the day where a cent was real money. Now that a cent has no significant value, the penny should go bye-bye.
Merchants will just program their registers to round off to the nearest nickel, just like they currently do when they calculate sales tax to the nearest penny.
Well, for people who just want one stamp, there’s another solution: round up to the next 5 cents, and include 1 cent or 2 cent stamps with the purchase. So if a person wants just one 39 cent stamp, sell them a 39c and a 1c stamp for 40 cents; and if a person wants a 63 cent stamp, sell them a 63c and a 2c stamp for 65 cents.
I was going to say this. Living in the UK at US military installations for a decade, I never saw a penny. I know our teachers were always pleased with our ability to round!
No, it wouldn’t. Long term inflaction is hard to figure, but one standard one can use is the cost of hiring a worker. My father was happy to make $15 a week during the 30s, so it is probable that 25 times, aside from the awkwardness of multiplying by 25, would take us back less than 75 years. If getting rid of pennies would lead to greater inflation, explain to me why the majority of people have a penny jar and never spend them. Since the penny was the smallest unit in Abe Lincoln’s day, I would have no objection if the quarter was the smallest unit.
When I spent six months in Switzerland in 1967, they had one and two centime coins, but only one company I did business with still used them. That one store (Jelmoil, if it interests you) had automatic change-making registers, so it was no problem for them. All other businesses just rounded. Three years later, the one and two centime pieces had disappeared officially. I don’t know when that happened exactly. A Swiss Franc then was worth 23c in US money, but probably at least $1.50 in current US money, so a one centime coin was worth more than a current US cent, but they still got rid of it. It is absurd to keep the cent and realistically, the nickel isn’t much use either (although harder to get rid of because of the peculiarity of the US coinage (most countries use 10, 20, 50 instead of 10, 25, 50; however they would face the same awkwardness dropping their 20).
Not so; please see above under “Swedish Rounding” and countries which have successfully removed smaller coins.
So what if they always round up. What is the average transaction say $10. That is a 4/10 of a percent increase in the worst case and 2/10 of a percent in the average case.
Norway, Denmark and Sweden are all down to 50 øre (0.50 kroner) as the lowest denomination coin. At the current exchange rate it’s worth almost 10 cents.
In Norway the last change was getting rid of the 10 øre, with the 5 and 25 having disappeared a decade or so before, while in Denmark they got rid of the 5 and 10 first, and kept the 25 until last. I remember them having little cards by the cash registers with rules for rounding of to the nearest 25 øre. We in Norway managed to round off to the nearest 10 without such help. 
And regarding merchants “scamming” customers. Don’t you have cash registers in the US? Here the ordinary store clerk can barely add 2 and 2 by counting on their fingers, and I doubt it would remain undiscovered for long if the merchant rigged the register to scam customers, even if he could reprogram it.
Hey buddy, I’m a merchant and not only would’t I do this from an honesty standpoint, it’s also not worth it.
Or just forget about cents and nickels and make a dime our base unit. Make a dime 1 dime. A dollar 10 dimes. Same thing, different name.
Or we could use the nickel. Or quarter. Eventually the dollar.