Inspired by the [thread=314081]dollar coin thread[/thread], I started thinking about if they replaced the dollar bill with a coin, we’ll start walking around with a lot more coins in our pockets and purses. I’m not against such a thing, I like the weight in my pocket and the jingling sound when I walk around. But I seem to collect quite a few coins as it is and wondered if dollar coins would make what’s now a reasonable amount of baggage to having to carry a ungodly amount of coins whenever I go out.
Then I started thinking that about half of the coins I gather are pennies. I wonder if we replace the dollar bill with a coin, maybe it might be a good idea to get rid of the penny once and for all. I know that won’t happen anytime soon but come on, is there any good reason to keep it around? I’ve heard arguments for both sides but I for one wouldn’t mind retiring the penny.
I’m with you, but the U.S. has been talking about dropping pennies for something like 30 years now. Really. I remember a Mad Magazine feature showing pictures of coins with captions. One had a lineup of all the U.S. coins, and the penny was saying, “It’s time to get rid of one of the coins. Hey, why are you guys all looking at me?” (The presidents on all the other coins face the viewer’s left, but Lincoln faces the viewer’s right.) That had to be c. 1978.
People complain that prices will be rounded up if we don’t have pennies. Pennies will actually disappear when it costs the mint more than a penny to make one. I think Cecil has covered this topic, but I’m too lazy to look up a link.
Prices don’t have to be rounded (up or down) without the penny. The total of each transaction does. Many countries which have eliminated their smallest coin or coins deal with this. For instance, here in Norge, the smallest coin is now worth 0.50 kroner. Go into the grocery store and you’ll still see items with prices ending in X.90kr. Goods sold by weight can still have prices ending in, say, X.79kr. The total is rounded up or down to the nearest half-krone. Same thing could easily happen in the US - prices can still be set to $1.99, your bulk purchase of apples can still cost $1.32, but when it’s all added up, it will be rounded up or down to the nearest nickel.
I for one think it’s long past time for the penny to go.
Gasoline is always $x.yy9 per gallon here. I don’t think there has ever been a tenth-penny coin, but as long as I can remember, there has been that .9¢ tacked onto the price of gas.
Actually, gasoline was priced that way at first because of price wars in Pennsylvania back when gas was cheap. One station sold gas at say .18 per gallon, and a competing station sold it at .179 per gallon. It made more sense in the thirties and forties, when a penny was actually worth something.
For what it’s worth, down here we got rid of one-cent and two-cent pieces ages ago - five cents is our smallest denomination of currency. Also, our smallest note is five dollars; we have one- and two- dollar coins. It all seems to be going well and making sense so far; I can’t imagine using notes for something smaller than five dollars, and I certainly wouldn’t bother to hold on to anything smaller than five cents. Admittedly, our dollar is worth less than yours, but not so much in recent times.
Hey, for once Australia did something, and America is following. Coolness.
Actually, now that I think about it… isn’t your penny huge (physically), anyway? I mean, five-cent pieces annoy me enough as it is, and they’re miniscule. The penny definitely has to go.
The penny is larger than the dime, but smaller than the nickel. I (like millions of other Yanks) have a big jar full of pennies. You end up with several pounds of pennies, but only end up with a few dollars. I wouldn’t mind seeing the penny go.
The smart solution is to leave the bills and coinage alone and revalue the money. For example, decree that effective 1/1/06, every dollar value in every account and every contract everywhere will be declared to be 1/10th of what it was. Ditto all prices.
In effect we rewind the clock on inflation by 30 years.
A penny now buys a bubblegum. Coffee, even at star-ripoff-evil-empire-bucks costs 15-25 cents. Your 100,000 mortage is now for 10,000 and your 850/mo mortage is now $85. Your $40,000/year job now pays $4000/yr.
This isn’t so hard. Lots of countries have done it and the only people who get affected at all are folks who’ve hoarded large amounts of currency.
The day after the revaluation inflation starts again and prices and wages and whatnot are free to move, just as they were.
You are the man. I agree, there’s something to me that is totally illogical about responding to inflation by simply getting rid of lower value currency. Something really bugs me about those countries where a cup of coffee costs 133,239 of the local currency unit. It just doesn’t make sense (sorry for the pun).
Why not instead make a penny actual worth something again? I assume it is because that is far more difficult than simply giving it up. I’m not so certain it is that simple to declare by fiat that “A penny will now be worth more.” You would need the market (read all of the people in the country) to agree with you, or it wouldn’t have much effect, right?
That would require deprecating all currency and reprinting new bills and minting new coins. That seems like way more trouble than dropping the smallest coin off the bottom and adding a new higher denomination from time to time.
Not to mention (there’s a specific word for this, but I’m forgetting it) the cost of making new menus/price tags as well as paying employees to make the changes. I’d imagine this would cost the country well into the millions.
I’ve said it there and I’ll repeat it here: a far better long-term solution would be to address the reasons that the buying power of a penny has declined, rather than getting rid of pennies. Government taxation and spending really needs to be cut, big-time.
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Seconded. Actually, this is one of the things I love about US bases overseas [or at least in Asia]. No pennies. None. Not a one.
Since the rounding generally evens out you don’t lose any money and you get the added benefit of not having all those extra, excess pennies to lug about or toss in old water jugs. You have your quarter, your dime, your nickel but no penny and so far I’ve seen no problems occuring because of it’s lack.
I see no reason why the same things can’t be done stateside.
Hey, am I the only one who likes my pennies? Cause I really do. I put them in a big jar, and then turn them in when they add up. I’m not ready to get rid of my pennies, thanks.
People have been saying this for many years. What makes it “the time” now that wasn’t true 20-30 years ago when people were complaining about the same thing?