Brother can you spare a penny?

posted at 8:30 am on March 30, 2012 by Jazz Shaw

Are you one of those people who still feels a nostalgic desire to keep the penny around? Don’t get me wrong… there is a lot to be said for nostalgia. I’m one of those relics who can actually remember buying penny candy as a child and looking forward to having some coins. But times have changed. I actually saw a gumball machine this week that took quarters, and the gumballs were not particularly large. So is it time to get rid of the penny?

Canada is taking the plunge.

Canada will withdraw the penny from circulation this year, saving taxpayers about C$11 million ($11 million) annually and forcing retailers to round prices to the nearest nickel, the government announced in its budget today.

The Royal Canadian Mint, which has produced 35 billion pennies since it began production in 1908, will cease distribution this fall due to the coin’s low purchasing power. Production and handling cost for the one-cent coin are a C$150- million drag on the economy, according to a 2006 study by Desjardins, a Quebec City-based bank.

“Pennies take up too much space on our dressers at home,” Finance Minister Jim Flaherty said in the text of his budget speech in Ottawa. “They take up far too much time for small businesses trying to grow and create jobs.”

Doug Mataconis offers a few arguments in favor of the US following the example of our neighbors to the north.

The situation is actually even nuttier here in the United States, where it costs 2.4 cents to produce each penny, but efforts to eliminate the penny have always died in Congress. The President’s new budget included a proposal to allow the US Mint to study the use alternative metals in coin production in the hope that this would reduce costs, but that’s likely only a short term measure. Given its almost non-existent purchasing power, there’s really no rational reason to keep pennies around. This is a Canadian idea we should think about doing ourselves, it seems.

I suppose logic could be on his side. Of course, others have published books taking the opposite view. One theory is that it will result in an unofficial “tax” on consumers because retailers will simply round everything up, artificially inflating prices. The counter-argument is that the invisible hand will balance it all out as other things are “rounded down.” But this is capitalism we’re talking about here! Who is going to “round down” when they could round up?

How much will it hit you in the wallet? (Or… err… purse. We’re equal opportunity here, you know.) Well, how many purchases do you make with cash each day? Remember… this change wouldn’t affect any credit or debit card purchases, personal checks or electronic and e-commerce transactions. The most you’ll get popped for is four cents each time. Even if you shop a lot it sounds like we’re not talking much more than ten dollars a month. (And before you go telling me how much that is to the very poor, the very poor aren’t shopping that often.)

I’m not sure if nostalgia is enough to keep the penny around. Perhaps it’s simply time to move on.

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Comment pages: 1 2

Pecozbill on March 30, 2012 at 9:45 AM

That is not the point. Those rounded up cents are not the government’s or the retailer’s, they are yours. You @ 233,000,000 x $1000 a month buys x 12 months @0.02 is a LOT of bucks gone with the wind.

Limerick on March 30, 2012 at 9:48 AM

So, logistically how does this rounding work?

SoRight on March 30, 2012 at 8:45 AM

When Sweden did it in the 1980′s (at that time their “penny” was 1/100th of a Swedish crown worth about 16 cents), they eliminated the 1 and 5 ore coins – rounding down if the value was 1, 2, 3 or 4 and up if it was 5, 6, 7, 8 or 9. Just like we were taught in school ;-)

It worked quite nicely. People ran a lot of situational purchasing scenarios and found that over time, no one was “ripped off.”

disa on March 30, 2012 at 9:48 AM

Yiwen on March 30, 2012 at 9:41 AM

Yiwen, don’t forget that in addition to the costs of the penny and nickel, the Mint is also going to lose most of the seigniorage from the production of the dollar coin since that ended last year (excepting a small number they’re continuing to produce for collectors). They are definitely going to experience a loss this year, so I’m expecting either executive or Congressional action by late this year or early 2013.

Doomberg on March 30, 2012 at 9:50 AM

Heck with the pennies and the nickel! …. Let’s get rid of the trolls!

KOOLAID2 on March 30, 2012 at 9:04 AM

A perfectly delightful way to start the weekend! LOLOLOL!

herm2416 on March 30, 2012 at 9:51 AM

Don’t dump your older pennies (1982 and earlier). They’re worth their weight in copper!

VibrioCocci on March 30, 2012 at 9:15 AM

Spot-on.

Hey, guys and gals, just for kicks, if you have any U.S. one cent coins in pocket change or within reach (the numismatist in me finds it so hard to call them “pennies”; perhaps I should get that inflexible stick out of my fundament! *heh*), take a quick check of the dates.

You’ll be hard-pressed to find one dated prior to 1982.

Pre-1982 one-cent coins are disappearing from circulation just as pre-1965 90% silver coinage disappeared from circulation. Gresham’s Law in action.

Dime IV on March 30, 2012 at 9:52 AM

I’m betting items won’t cost us a penny more. Stores price items at $4.99 instead of $5.00 for a reason. People are more likely to buy an item whose first digit is a 4 than a 5. That’s why gas prices use the ridiculous 9/10 of a penny; it works! Gas isn’t 4 dollars a gallon, it’s 3 dollars, ninety-nine and nine tenths cents per gallon.

My bet; that $4.99 price will go to $4.95.

Russ in OR on March 30, 2012 at 9:52 AM

I’d get rid of the penny on one condition: kick FDR off the dime and put Lincoln on instead.

Othniel on March 30, 2012 at 9:02 AM

I’ll second that!

disa on March 30, 2012 at 9:52 AM

BX/PXes at oversea installations dropped the penny decades ago due to handling costs. It’s long past practical to drop the penny. If you made 1000 purchases of items priced at x.99, you “lost ” ten bucks. Whoopee. Considering time and effort and you’re at minimum wages, that was an hour plus change of wages. Again, Whoopee. Same thing with taxes, the taxing authority can decide to round every thing up or down based on whatever rules they issue just like they do for fractional pennies.

AH_C on March 30, 2012 at 9:53 AM

Doomberg on March 30, 2012 at 9:50 AM

So does this mean the Mint is or is not going full tilt to get those new one dollar, five-dollar and ten-dollar Obama-coins into circulation in time for the inauguration?

[To replace the penny, nickel and dime, that is.]

:-)

coldwarrior on March 30, 2012 at 9:54 AM

Limerick on March 30, 2012 at 9:48 AM

Your scenario would only work if I spent $1 1000 times a month and the rounding never favored me. As things stand for me personally, I spend about $30 in cash a month mainly on tolls when I travel (so no rounding there). I *might* lose $0.10 tops all told.

How many people do you know making 1000 cash transactions overa 30 day period?

Kelligan on March 30, 2012 at 9:59 AM

My bet; that $4.99 price will go to $4.95.

Russ in OR on March 30, 2012 at 9:52 AM

Reality, $4.99 will stay $4.99, Apply a 7% sales tax, the final bill comes to $5.3393.

Where as a merchant would “rip you off” today for that 7 hundreds of a cent, tomorrow they would “rip you off” for a whipping 1.07 cents. Or you could pay by card and get back to being ripped off for a mere 7 hundreds of a cent.

MNHawk on March 30, 2012 at 10:01 AM

When you think about it. This country has had much more than 10x inflation since the origin of the penny. Yet, they didn’t have 1/10 penny coin back then. So, the value of rounding to the nearest dime is actually LESS than the rounding they did to the nearest penny 200 years ago.

blink on March 30, 2012 at 9:49 AM

We had a 1/2 cent up until 1857. It was discontinued because no one really used it the last 30 years or so it was made. They thought it was worthless, even though it was worth about 20c or so in today’s money.

And as I point out in a previous post, we’ve had 25x inflation since 1910. 10 times since 1947. 5 times since 1973.

MNHawk on March 30, 2012 at 10:05 AM

Accounting transactions still use mills (1/10 cent) for which no coin exists to minimize rounding errors. But more to the point, most transactions today are credit transfers where cents would continue to be used. Only cash transactions would suffer from the ’rounding up’ profit grab by the local liquor store. In the not too distant future society will be cash free. Some places are already moving in this direction.

Annar on March 30, 2012 at 10:09 AM

Jazz said “I suppose logic could be on his side. Of course, others have published books taking the opposite view. One theory is that it will result in an unofficial “tax” on consumers because retailers will simply round everything up, artificially inflating prices. The counter-argument is that the invisible hand will balance it all out as other things are “rounded down.” But this is capitalism we’re talking about here! Who is going to “round down” when they could round up?

I’ve heard that the advocates of eliminating the penny are pushing for use of the Swedish rounding system. “Supposedly” there’d be rounding down as well as rounding up.”

Note that I did say “Supposedly”: http://en.wikipedia.org/wiki/Swedish_rounding

Yiwen on March 30, 2012 at 10:11 AM

You’ll be hard-pressed to find one dated prior to 1982.

Pre-1982 one-cent coins are disappearing from circulation just as pre-1965 90% silver coinage disappeared from circulation. Gresham’s Law in action.

Dime IV on March 30, 2012 at 9:52 AM

I went to my stash of recently acquired coins. There were 14 pennies and six were before 1982. Either I have been receiving older coins than most people or Gresham’s law is operating very slowly.

thuja on March 30, 2012 at 10:12 AM

Eliminate the penny, the nickel, and the paper dollar. Print a boatload of $2 bills and move on already.

KrebsCyclist on March 30, 2012 at 10:15 AM

What ever happened to the “bit”

Kelligan on March 30, 2012 at 10:22 AM

Anyone actually made purchases in a real five-and-dime store?

Have a few half-cent Franklin stamps sitting on the desk, and a few 1 and 1/4 cent and 4 1/2 cent stamps…and newer 7.7-cent and 8.4-cent stamps…and a barrel of pennies…used to use them quite frequently back in the day.

You all do realize that the dollar has lost about half of its worth since 2009.

The coinage or postage isn’t the problem…it is the ongoing devaluation of the dollar across the board.

coldwarrior on March 30, 2012 at 10:23 AM

So does this mean the Mint is or is not going full tilt to get those new one dollar, five-dollar and ten-dollar Obama-coins into circulation in time for the inauguration?

[To replace the penny, nickel and dime, that is.]

:-)

coldwarrior on March 30, 2012 at 9:54 AM

The answer is: NOT unless Congress authorizes it.
The Mint has NO latitude in terms of circulating coin design, weight, materials, size, etc. Congress controls ALL of it.

A source to back this up: US Mint’s 2013 Budget Submission to Congress, see p. 12 under “Legislative Proposals” and “Coin Materials Modernization Act”:

http://www.treasury.gov/about/budget-performance/Documents/20%20-%20FY%202013%20US%20Mint%20CJ.pdf

The Mint and the Treasury have been at trying to wrest authority away from Congress to allow for greater latitude to produce coins with cheaper materials for years. I literally sat in a House Financial Services subcommittee hearing in July 2010 that included none other than Ron Paul and Mike Castle. Ugly Barney (the chair of the Full committee) even came in for a brief period (and fortunately for me, Moobs were nowhere in sight!). Congress politely told the Mint and the Treasury the equivalent of “Not only NO, but HELL no, we won’t give you the authority to decide which materials would be cheapest to make usable coins out of.”

In essence, the Mint is totally boxed in by the Hill. They can’t make a move without Congressional approval.

You want your coins to be made less wastefully?
Contact your representatives in Congress and complain.

Yiwen on March 30, 2012 at 10:23 AM

What ever happened to the “bit”

Kelligan on March 30, 2012 at 10:22 AM

Whore inflation?

Yoop on March 30, 2012 at 10:26 AM

What ever happened to the “bit”

Kelligan on March 30, 2012 at 10:22 AM

The US went decimal with its own money. A bit was more than a penny anyway.

cozmo on March 30, 2012 at 10:31 AM

How did we ever get by, circa 1973, when the smallest denomination was a nickel (in today’s dollars.) How did we ever get by, in 1947, when the smallest denomination of money was a dime.
….
MNHawk on March 30, 2012 at 8:49 AM

Actually , during WWII, we had the Mil, 1/1000 th of a dollar. We actually had 1,2 and 5 MIl. They were made out of cardboard. and I seem to remember some were made out of pot metal. That is why the gasoline is sold with as $x.xx.9.

This whole need to get rid of the smaller coins is due to inflation. No administration, R/D, L/C, M/Lib can afford to get rid of smaller coins because that admits a back door to revaluation of the dollar, and therefore bad fiscal decisions. Ideally, we should devalur the dollar to 1:10. If we wait much longer, it will have to be 1:40.

Old Country Boy on March 30, 2012 at 10:35 AM

HEY, ED MORRISSEY!

.
…. I THINK I’LL JUST DOUBLE DOWN ON STUPIDITY!
.

Hey, Jazz Shaw!

Why repost the somewhat dishonest, misleading HuffPo headline about Chris Christie saying he’d be more prepared for higher office after more time running a state? The misleading headline that you (or whoever) reposted makes it sound like Christie is expecting or wanting Obama to win this November, which would enable Christie to run in 2016. That headline is a total misrepresentation of what Christie said in the Oprah interview.

bluegill on March 30, 2012 at 8:51 AM

KOOLAID2 on March 30, 2012 at 10:35 AM

KOOLAID2 on March 30, 2012 at 10:35 AM

Geeze man! You could have let the troll hide until the next thread.

A new page was a chance for a fresh start.

If you wanted to bring something up from the first page, for gosh sakes, why not the strippers!

cozmo on March 30, 2012 at 10:40 AM

If you get rid of the nickel then you must also get rid of the quarter. But then you can introduce a new 50 cent piece with Ronald Reagan’s face on it.

Red Creek on March 30, 2012 at 10:48 AM

I have friends who make the zinc blanks for pennies, save their jobs, keep the penny!!! No joke, the penny blanks are made 30 miles from my house.

Mini-14 on March 30, 2012 at 10:50 AM

…All these supposed intelligent people here at HA and not one of them seems to know that we don’t have a “penny” in the United States. Only the lowly “one cent” coin.

:-)

What ever happened to the “bit”

Kelligan on March 30, 2012 at 10:22 AM

The US went decimal with its own money. A bit was more than a penny anyway.

cozmo on March 30, 2012 at 10:31 AM

For the record, a bit was one half of a quarter of a “piece of eight”, people used to chop the silver Real coin into 1/8′s in order to make change. Thus a Quarter can be called 2 bits.

BierManVA on March 30, 2012 at 10:53 AM

There was an episode of Married With Children… Steve’s idea for the ninety-nine cents store, the obvious response from Al was – ‘What about tax?’

Someone profits from decisions like this, doesn’t matter what reasonable reasoning they might give for doing it, someone always profits – spoiler alert, it ain’t us.

Ukiah on March 30, 2012 at 10:55 AM

Ideally, we should devalur the dollar to 1:10. If we wait much longer, it will have to be 1:40.

Old Country Boy on March 30, 2012 at 10:35 AM

Devaluing doesn’t kill inflation. Plus it’s a pretty dramatic step, as opposed to just a little redesign of the money system.

South Korea, where everything is price in the thousands, is a prime target for devaluation along that lines.

Make our new dimes out of the zinc blanks, to minimize economic disruption. Make the nickels our new 50c pieces. Quarters the new dollars. Three coins circulation are all that’s needed.

MNHawk on March 30, 2012 at 10:57 AM

I’m betting items won’t cost us a penny more. Stores price items at $4.99 instead of $5.00 for a reason. People are more likely to buy an item whose first digit is a 4 than a 5. That’s why gas prices use the ridiculous 9/10 of a penny; it works! Gas isn’t 4 dollars a gallon, it’s 3 dollars, ninety-nine and nine tenths cents per gallon.

My bet; that $4.99 price will go to $4.95.

Russ in OR on March 30, 2012 at 9:52 AM

People aren’t fooled by those prices with 0.99 or 9.99 at the end. Buy a 4.99 item with a 6% state sales tax, and you’re charged $5.29 and have to fish your pocket for change above and beyond a $5 bill. If an after-tax price ends in 0.01 or 0.02, lots of merchants round down and don’t bother asking for pennies or making change.

Even if the Mint stopped making pennies this year, there are billions of them in circulation, so people would probably still use them until enough of them were removed from circulation by the Fed.

Steve Z on March 30, 2012 at 11:01 AM

blueshill was here.

Bmore on March 30, 2012 at 11:02 AM

But if there are no more pennies, we at Hot Air can’t put our two cents’ worth in any more.

Steve Z on March 30, 2012 at 11:03 AM

Getting rid of the penny because of its uselessness would be indisputable proof of criminal acts committed to bring about the intentional decline in value of the fiat dollar by the Fed at the behest of the scumbag politicians in a corrupt government. In other words, conspiracy, fraud, and theft by swindle. All citizens of the United States are victims of this crime being perpetually perpetrated on them by their government.

So the question must be: Does the government want to eliminate the penny, which would be a de facto admission of guilt, or do they want to keep up the mirage of the value of their soon-to-be-Zimbabwe-like toilet paper currency by maintaining the status quo?

Keep the mint going, keep the presses printing, keep Ben’s helicopters flying.

AttaBoyLuther on March 30, 2012 at 11:09 AM

I am a life member of the ANA and we have been discussing the demise of the one cent coin for many, many years. Exhaustive mathematical research has been done in the US as well as other countries. All say the same thing, the financial impact to the consumer is mathematically insignificant and in a worst case, would cost someone a few dollars a year. The cost savings to the Gov’t are huge though. Not to mention shipping and handling costs to Banks and merchants, etc.

It make no sense to continue production of the cent. Other than for nostalgic reasons.

BierManVA on March 30, 2012 at 11:11 AM

What ever happened to the “bit”

Kelligan on March 30, 2012 at 10:22 AM

A bit is 1/8th of a Spanish coin of the 1700s called the Spanish dollar. The silver coin was actually chopped into eight pieces in making change. The first American dollar was mented to the same metallic standard. (weight and purity) The Spanish Dollar ceased being legal tender in the USofA with the Coinage Act of 1857.

Incidentally it is much easier to get away with shaving metal of the hacked bit than an intact coin.

Slowburn on March 30, 2012 at 11:11 AM

I went to my stash of recently acquired coins. There were 14 pennies and six were before 1982. Either I have been receiving older coins than most people or Gresham’s law is operating very slowly.

thuja on March 30, 2012 at 10:12 AM

I agree here. While copper pennies are definitely being hoarded, they are still available in circulation. Give it another 10-15 years though and they will start to disappear.

So does this mean the Mint is or is not going full tilt to get those new one dollar, five-dollar and ten-dollar Obama-coins into circulation in time for the inauguration?

[To replace the penny, nickel and dime, that is.]

:-)

coldwarrior on March 30, 2012 at 9:54 AM

You’re mistaken. If they make a $10 coin, they’ll put William Howard Taft on it. A big coin needs a big president! ;-)

Doomberg on March 30, 2012 at 11:11 AM

Canada will have some problems in the value of their currency. Taxes, fees, Foreign exchange, will favor banks when the cash transactions go electronic. Banks will round down when paying out but encourage rounding up when receiving funds.

Egfrow on March 30, 2012 at 11:14 AM

It make no sense to continue production of the cent. Other than for nostalgic reasons.

BierManVA on March 30, 2012 at 11:11 AM

Plastic coins with metal center cores would work just as cheap. There is already allot of plastic in the bills.

Egfrow on March 30, 2012 at 11:17 AM

I don’t want my gas prices rising a nickel at a time. :(

sisterchristian on March 30, 2012 at 11:19 AM

Who said you can’t price items to the penny? It’s the end total that counts and the method of payment.

TexAz on March 30, 2012 at 11:20 AM

Plastic coins with metal center cores would work just as cheap. There is already allot of plastic in the bills.

Egfrow on March 30, 2012 at 11:17 AM

Sorry, the only “plastic” in a bill is the security strip. And it’s polyester I believe here in the US. And creating coins with different types of cores is more difficult for machinery and adds handling and shipping costs for the producers. It’s a wash for the one cent coin. Higher denominations would make sense though.

BierManVA on March 30, 2012 at 11:24 AM

Just a point to consider: the minimum unit of a nations currency is one of the factors that affects the rate of monetary inflation. Not the only factor, but still a significant one. It defines the lowest amount a vendor can ask for and expect a customer to be able to pay. When that unit has an asking value five times higher, the vendors incentive to drop the price lower is reduced.

Frequent credit transactions reduce the effect of the minimum currency somewhat, but they don’t reduce the effect to zero unless ALL transactions are done by credit.

So, dropping the penny is not a thing that would have no consequence to the value of the rest of your holdings. It would reduce the value of everything else you own by a small fraction.

DrUrchin on March 30, 2012 at 11:26 AM

Right now the per gallon price is being raised $0.001 at a time. What makes you think they would suddenly jump by $0.05 at a time?

blink on March 30, 2012 at 11:22 AM

BS. Two days ago my gas price went up $0.20 overnight. /s

Yoop on March 30, 2012 at 11:29 AM

The cost of making the penny has also gone up because the government is becoming less and less efficient at minting them. If the total cost to produce the penny is $0.0241 and the raw material cost is $0.0197, the other production/distribution costs eat up a whopping 44% of the face value of the penny, and I sort of doubt that considers a lot of pension costs or the free rent for facilities.

theperfecteconomist on March 30, 2012 at 11:29 AM

I don’t want my gas prices rising a nickel at a time. :(

sisterchristian on March 30, 2012 at 11:19 AM

Gas prices are generally priced in 1/10 of a penny to start, and the final price is rounded, so that wouldn’t really change.

theperfecteconomist on March 30, 2012 at 11:31 AM

Whoever said “stop devaluing the currency” was on the right track. The only thing eliminating the penny does is imply permission to keep debasing our money.

TouchingTophet on March 30, 2012 at 11:58 AM

If people want to start rounding things off in order to not deal with pennies and save time, then by all means go ahead. Just make sure you round it down in the customer’s favor.

Captain Kirock on March 30, 2012 at 12:16 PM

1. No, it’s not the only thing that eliminating the penny does so your statement is inaccurate.

2. Continued expansion of the dollar is likely to continue as long as we have huge federal deficits. I don’t think the budget battles are influenced much by the existence of the penny.

blink on March 30, 2012 at 12:03 PM

Ah, a pedant on pennies. Very well: eliminating the penny implies permission to keep debasing our money. (Not to the exclusion of other things, though! Heaven forfend!) I for one am not okay with that.

And okay, the big things we oppose are going to happen anyway, so there’s no reason to sweat the smaller contributing factors. I hear that argument all too often from liberals.

Rather than wrecking our coins to accommodate the decadence of our currency, maybe we could make efforts to reform our currency to accommodate the hierarchy of our coins. Or is that too hard because what you don’t like is just too likely to continue?

TouchingTophet on March 30, 2012 at 12:24 PM

The penny is the only brown coin in widespread circulation in the U.S.

RAAAAAAAAAAACISTS!!!1!1!!!

/

RedNewEnglander on March 30, 2012 at 12:32 PM

They did all of this rounding stuff in Superman 3.

Didn’t end well.

catmman on March 30, 2012 at 12:35 PM

A 1943 copper Lincoln penny would be nice.

profitsbeard on March 30, 2012 at 12:44 PM

blink on March 30, 2012 at 12:45 PM

You’re attributing to me arguments I’m not making. I never said that refusing to eliminate the penny is an attempt (“irrational” or otherwise) to balance the budget — just that you’re ceding ground to the people trying to establish the premise that our money is worthless in the first place. But our money is not worthless; our monetary policy is. In short, don’t throw out the penny. Fix it.

If we stop debasing our currency, we’ll end up in a place where we don’t have to get rid of the penny. On the flip-side, if we get rid of the penny, there’s no guarantee whatsoever that we’ll be any closer to fixing our currency; in fact, if one commentator’s remarks about Australia serve as any indicator, we’ll just open the door to more government interference and “fairness”-sowing. In short, penny-elimination is a Band-Aid solution that will accomplish nothing in the long run without serious reform of our monetary policy (at which point, again, we won’t need to throw out the penny in the first place).

And again, “make efforts to reform our currency” simply does not translate to my “suggesting that we should deliberately cause deflation in order to preserve the penny[.]” I’m starting to think that you’re actually arguing not with me, but with someone whose points (which you’ve made up) you can easily refute as “epically stupid.”

TouchingTophet on March 30, 2012 at 1:02 PM

If you get rid of the nickel then you must also get rid of the quarter. But then you can introduce a new 50 cent piece with Ronald Reagan’s face on it.

Red Creek on March 30, 2012 at 10:48 AM

Yes we already have an unused dollar coin because it feels like a quarter. Thus that would become useable as well. Thus just dimes and dollar coins and no dollar bills. It would save the mint a bunch. The nickle cost 11 cents to make. Change would be way easier in the pocket and vending machines mostly take the new dollar (problem with a nickle sized half dollar).

Even a candy bar cost a dollar at most stores now.

Steveangell on March 30, 2012 at 1:30 PM

The nickel = the new penny.

cheetah2 on March 30, 2012 at 1:43 PM

Ditch the penny.

Ditch the $1 and $2 bills and replace them with coins.

Save a ton of money.

Why is this a problem?

gekkobear on March 30, 2012 at 1:57 PM

Whoever said “stop devaluing the currency” was on the right track. The only thing eliminating the penny does is imply permission to keep debasing our money.

TouchingTophet on March 30, 2012 at 11:58 AM

Really?

Let me reach into my pocket, hey I have a $5 and a $100. Can you tell me the MATERIAL VALUE difference between the two?

Why is a $100 worth 20X what a $5 is worth? Because the government backs it. And since it’s a piece of paper, it has no other material value.

But you’re worried about debasing our coinage; the tiniest increments?

Are you sure you’ve got a reasonable argument here? If I’m not mistaken, something like 90% of US currency nylon exists electronically, and most of the rest of the currency exists as paper bills and not coinage.

But affecting this small fraction of a fraction is going to “debase our currency”? That boat sailed long before either of us were born.

You’re not closing the barn door after the horse is out; you’re building a barn years after your horse was killed and eaten by wolves.

gekkobear on March 30, 2012 at 2:03 PM

dollar coins won’t be practical until g-strings are made with coin slots.
A second look at the $2 bill?

crosspatch on March 30, 2012 at 8:57 AM

I can’t believe I saw this. The temptation is sooo overwhelming! I can’t suppress it. Hee Hee .. Oh well – You mean you don’t know where the coin slot is? Forgive me Jazz.

Old Country Boy on March 30, 2012 at 2:17 PM

For all you mathematical whizzes that are chasing gnats about how to figure the sales tax without the penny; stores today and changemaking computer programs do that already. Have been doing that for years. Before they did the computer programs to calculate sales taxes on amounts smaller than the coinage or sales tax percent, they gave xeroxed, mimeographed, or graphic ananlogue tables to the cashier. We have always had this problem every since we got rid of the mil and since when have had irrational sales taxes. Geezzz!

Old Country Boy on March 30, 2012 at 2:26 PM

Old Country Boy on March 30, 2012 at 2:17 PM

All well and good…until they start making change.

coldwarrior on March 30, 2012 at 2:42 PM

Just to indulge my inner coin geek: ;-)

I went to my stash of recently acquired coins. There were 14 pennies and six were before 1982. Either I have been receiving older coins than most people or Gresham’s law is operating very slowly.

thuja on March 30, 2012 at 10:12 AM

I agree here. While copper pennies are definitely being hoarded, they are still available in circulation. Give it another 10-15 years though and they will start to disappear.

[snip]

coldwarrior on March 30, 2012 at 9:54 AM

I am one of those who (quickly and) accurately examines every coin that enters or leaves my possession. I have actually noticed an increase in the copper pennies since about 2009. Anyone guess why?

.
.
.
.
.
.

It’s because in times of economic stress, all sorts of old – often collectible coins find their way out of grandma’s dusty jar, back into circulation. The more distresses the geographical area you are in, the more surprises show up. This is also true for old bills.

I just came back from California, and found several wheat pennies, a silver nickel (minted from 1941-1945 to save nickel for the war effort) and a lot of mint-condition 25-year-old dimes and quarters, whereas here in south Louisiana, which has a relatively well-off economy compared to many parts of California, these rarely surface.

You can almost measure economic stress by logging the appearance of rarities in your pocket change :-)

Try collecting the whole set of six different 2009 quarters and get back to me when you complete it. They are rare as hen’s teeth, and highly collectible in near-mint condition, because the appearance of “Grandma’s-jar coins” meant that the demand for new coins was very low, and so the 2009 quarter mintage – already split between six different designs due to the end of the state-quarter program – was the lowest since about 1961 or 1962.

Coin-collecting kids of the future will shed tears over their inability to fill the blank holes in their collecting booklets, meant for the 2009 quarters. (Hint to future Grannies!!) :-)

cane_loader on March 30, 2012 at 2:52 PM

Revalue our currency to 5 or 10 times greater then its current value. Problem solved.

NotCoach on March 30, 2012 at 2:56 PM

You wouldn’t think that such a recent mintage as 2009 would be rare – but I see a 2009 quarter maybe once a month – and in three years of examining my pocket change, am still yet to see a single example of two of the six different designs.

2009 was a one-year-only program, called the District of Columbia and United States Territories Quarter Program

The designs on the reverse side were:

Washington, D.C., Puerto Rico, Guam, United States Virgin Islands, American Samoa, and the Northern Mariana Islands.

I have never yet found a Virgin-Islands nor Northern-Marianas-Islands quarter in my change, in 3 years of looking!

Due to the fact that the already-50-year-low mintage was then split 6 ways, these are the most collectible U.S. quarters in maybe 100 years or more.

Just giving Grannies a hint :-)

cane_loader on March 30, 2012 at 3:03 PM

The reason the last three 2009 quarters are rarer is that during the mintage year, with the quarters already scheduled to be minted in order, the ecomony continues to crater, and the order for the last three designs kept getting revised downward. The mint was obligated to mint them, but never had a contract as to how many!

I got quite a few D.C. quarters – then a decent number of Puerto-Ricos, maybe four Guams, about five American Samoas, but can’t get off the schneid for the Virgin Islands or Northern Marianas.

And remember, I’m a guy who gives a visual once-over to every quarter I spend – even at a coin-operated car wash.

cane_loader on March 30, 2012 at 3:06 PM

The DC & US Territories Quarters series had 636.2 million coins produced for the entire series across six designs. The highest overall mintage occurred for the 2009 District of Columbia Quarter with 172.4 million produced. Mintages for each subsequent release declined, culminating with the lowest mintage Northern Mariana Islands Quarter at 72.8 million.

Mintages for this year’s quarter series are far below the levels experienced for the prior 50 State Quarters series. Each year from 1999 to 2008, at least 2 billion State Quarters had been produced, with nearly 35 billion produced during the entire 10 year series. The highest mintage for an individual state was 1.59 billion for the 2000 Virginia Quarter. The lowest mintage for an individual state was 416.6 million for the 2008 Oklahoma Quarter.

Read the numbers – the last three 2009 quarters were 6 times rarer than the rarest quarter of the previous 10 years!

cane_loader on March 30, 2012 at 3:12 PM

OK – coin geek OFF!

I had to talk about the 2009 quarters, as I found it fascinating how economic depression and the “Granny-jar” effect could so severely limit coin minting, and then by random chance happen to coincide with a year scheduled for SIX different quarter designs, to produce such a modern rarity as the individual 2009 quarters.

SOrt of like the Seventh Wave theory or something.

Have a great day, everyone :-)

And look for near-mint-condition 2009 quarters in your change, if you get bored.

cane_loader on March 30, 2012 at 3:15 PM

The goal is to eliminate all cash and make all transactions electronic… to make it more difficult to avoid taxes.

Colony14 on March 30, 2012 at 4:36 PM

The goal is to eliminate all cash and make all transactions electronic… to make it more difficult to avoid taxes.

Colony14 on March 30, 2012 at 4:36 PM

I tell you what – this doesn’t even have to be a conspiracy; it can be the result of an economically driven chain of events.

Were they to eliminate the penny, then the choice is to either make ALL customers – credit/debit and cash – deal with the 5-cent increments – or to price cash transactions in five-cent increments while leaving electronic transactions in one-cent increments.

I think that the pressure would be toward the latter, because people would argue that the percentage of cash transactions has become much smaller than that of electronic transactions – and so why should electronic customers be inconvenienced/overtaxed – etc.

Likely, the herd will move toward calling cash customers Luddites – and putting the pain of the elimination of the penny squarely upon them – like the gas stations that give a discount for cash or for using the station’s proprietary card.

The end result is that I foresee a growing discrimination against cash customers – just because cash requires more handling.

Southwest Airlines – and probably others, too, now do NOT accept cash during the flight to buy food or drink. The justification is that this helps reduce “shrinkage” and employee embezzlement.

I know from experience when I was young, that it really sucked when one of your co-workers was scooping from the cash drawer. It was hard to detect, and whoever was working with that thief was put under suspicion, as well.

So…. I predict that the elimination of the penny will/would actually be a very significant precipitating event in the elimination of cash. Sweden, already, has gone nearly cashless.

I don’t know what Sweden would do in an electronic emergency, or whether bikini-clad blondes are an acceptable form of barter.

The bigger question is….

WHAT WILL THIS DO TO THE HORDES OF ILLEGAL IMMIGRANTS WORKING UNDER THE TABLE, DODGING THE I.R.S., AND WIRING THE MONEY BACK TO MEXICO?

Do y’all start to see where this is going?….

cane_loader on March 30, 2012 at 4:52 PM

We most certainly have a “penny” in the US. A penny is a one cent coin.

blink on March 30, 2012 at 11:37 AM

A “Penny” is only slang for the US One Cent coin. It is a carry over from the days we were British. The British have Pounds and Pence, “penny” for short, we have Dollars and Cents “cents” for short. If you were to query the Gov’t or mint, they would confirm the correct terminology.

I was only being funny. Some people don’t get sarcasm I guess.

BierManVA on March 30, 2012 at 5:49 PM

used to this

sartana on March 31, 2012 at 1:28 AM

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