Regarding Cecil’s most recent column: whether or not the penny should still be minted due to the negative signoriage is a controversial subject which seems to come up every so often in Congress. The New Yorker had a wonderful article in March about this controversy which is a must-read for anyone interested.
MODERATOR NOTES: PLease be aware that this is a thread from May 2008, when the column first appeared. The thread has been revived in September 2014, when the thread is run as a “classic.” This is fine, we got no problem with reviving old threads, I just want y’all to be aware and don’t worry about responding to something someone said six years ago. – CKDH
So according to Cecil’s column, they’re going to start making steel pennies again, like in WWII. Used to have a 1943 steel. I wonder how often they’ll get mistaken for dimes? (And how much does it cost to make a dime? The face value is twice that of a nickel, but it’s a lot less metal.)
They didn’t have pennies, when I was just a lad! No nickles either.
Yes, they had coins called pennies and nickles, but they were worth at least what a dime is worth today. The #1 reason that a penny now costs more the 1¢ to produce is inflation. If we just got rid of pennies entirely, we’d still have coinage with a finer resolution than we had for most of US history.
And while we’re at it, let’s make our paper money different sizes and colors like most countries do. Besides helping blind people, it would also make the rest of less likely to dispute how much we handed the cashier.
I’m so glad someone brought this up. I can’t understand why we can’t “change”. Hand in hand with the issue of eliminating low-valued coins is the introduction of high valued ones, but as we all know the dollar coins are failing miserably. Though the usual explanation is that nobody wants them, the truth is a bit more complicated, as many people do want them, but they are relatively difficult to get. A major factor, IMO, is the refusal of the armored transport companies to handle them, and the government’s unwillingness to dictate that they should. I think in any other country this would not be an issue.
Changing the coinage scheme to reflect contemporary price levels would just be done by government fiat, and those in the business of handling money would be compelled to adapt. But in this country, it seems that people think they have a Constitutional right to dollar bills, or pennies, or whatever other archaic and absurdly low denominated form of money they want.
I take the bus occasionally. When I do, I always try to take five or ten pennies along with me, because it’s one of the few things you can conveniently spend them on. The Santa Monica municipal bus line charges .75 for a standard fare, so I can count out .70 in quarters, dimes, and nickels, and then add in five pennies, and voila!–I’ve gotten rid of them.
Today I was struck by the fact that there are circulating coins worth one-effing-seventy-fifth of a city bus ride. And they really do circulate! People have to handle them in their daily lives. Oh wait–they’re denominated at 0.133 are worth!! Oh my god!! Turns out the cost of making one is really worth–what? About 0.026 of a bus ride! Why in the name of all that’s holy do we need a coin that’s worth .013, or even .026, of a bus ride? For god’s sake how much price resolution do we need?
I am so sick of this issue. I’ve wanted something to be done for years–for decades really–, but most people refuse to let that happen.
I think turning the nickle into a tiny dime is a great idea. Making coins out of light aluminum is too. (Is China’s 1 jiao coin made of aluminum? because it’s terrifically light?)
Everyone will hate coins less if they’re nice and small and light. What’s the downside? I guess such coins may be easier to lose. And that’s a problem if you image a $5 coin (or a coin that used to be worth $5). But for 25/10/5 cents it’s the perfect direction. None of us hate coins per se, we just hate the bulk.
Also, here’s something that’s often not talked about: GCFs between denominations
We have a real problem if we want to eliminate the nickle because the quarter and the dime don’t fit with each other. Yet to want to get rid of the dime is too radical (there’s not much sense in it, and everyone loves the little convenient dime). So what I propose it to get rid of the quarter too, and instead move up a notch and rely on the half-dollar. Then we can toss the dollar-coin and dollar bill out too and use the $2 bill.
Everyone loves fifty cent coins and $2 bills, and at heart it’s just an adjustment for inflation of the system we’ve gotten used to. It’s also such a neat compromise to the ‘dollar bills suck’ vs ‘dollar coins suck more’ debate.
Actually, given the inflation since 1857, we should eliminate the cent, the nickel, the dime, and the quarter dollar, create a 20¢ coin, redesign the half-dollar, and the dollar, add $2, $5, $10, and $20 coins, and eliminate paper money altogether (because of other problems than inflation).
It might even be fun trying a return to hard money, but, even with $20 coins, the amount of real money (as opposed to checks, credit-card transactions, etc.) in the flow wouldn’t really make much difference. Maybe if more coins were added for $50, $100, $200, and $500 (after inflation, that’s not too far from the old Double Eagle)…
KEEP
$0.25 coin (lowest coin value)
$0.50 coin
$1.00 coin
$2.00 bill and up
Merchants get to keep their quarter machines, total coin weight in people’s pockets would not change significantly, and people wouldn’t need coin jars so much. Round everything to the nearest quarter dollar.
Everyone can look forward to pennies for at least a little while. 2009 will see 4 new reverse designs in commemoration of 200 years since Lincoln’s birth, and a colectors’ penny in good old-fashioned bronze! (Not worth a cite, but usmint.gov has some info if you care.) Pure numismatic trivia.
Though the penny and nickel are well known to cost more to make than face value, it’s not all in the price of the metal. Labor costs are involved, and they always go up; the value of zinc & copper in a penny is worth less than a cent. For now. Nickels are different; if you got a nickel for 5¢ and sold it for its metal right now, you’d make a quick 40-50% profit (doing this is a federal offense, BTW).
So, momentum will keep us going with archaic stuff like pennies, nickels, and $1 bills until Congress changes the law, which won’t happen until (vocal public demand)>(mining company & other lobbyists). The amount lost to the Treasury is insignificant; I think it will be when a couple major metal smuggling operations get busted that people will squawk for “something to be done about these criminals”.
Myself, I’d go with dime, quarter, half, dollar, 2 dollar, and 5 dollar coins, and bills going up to $5000. Not that the gummint ever listens to me.
I can’t think of any good reasons to keep the worthless 1¢ and 5¢ coins, but a whimsical reason would be that they make it very painless indeed to do a little saving. (A very little.) Every 13-16 months, my old green vase gets full, and I go to the bank and get ~$80 that I can effectively regard as free money.
$10 or $20 would be too much for a coin, in my opinion, even as pro-coin as I tend to be. Most people would mind losing a $10 coin quite a bit, but $5 wouldn’t be too much for a coin (again IMO).
Actually, according to the Mint’s website, the collector pennies will be made of the same material the penny was made of when Lincoln first appeared on the penny in 1909- 95% copper with the remainder tin and zinc.
The county coins would be pretty confusing in states like Connecticut and Massachusetts, where most people don’t even know the name of their own county, because counties play so little role and usually don’t have county government at all.
But here’s an idea. Maybe we can convince local merchants to round up each purchase to nearest nickel or dime, then give the difference to local government, with the voters having the decision whether to use it increase services or reduce property taxes.
