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

I want my two dol…PENNIES!

Laura in Maryland on March 30, 2012 at 8:36 AM

Well, let’s see what happens in Canada, then take it from there.

bluegill on March 30, 2012 at 8:39 AM

Cool video that describes this issue pretty well. He provides lots of neat history of the penny.

Mord on March 30, 2012 at 8:39 AM

The smartest move might be to eliminate the penny and the nickel at the same time, round everything to the nearest tenth instead of the hundredth, and make room in our pocket for dollar coins. Dollar bills–more importantly, the rate at which they wear out–are a bigger sinkhole to the treasury than the penny is.

Caustic Conservative on March 30, 2012 at 8:40 AM

Australia did this some years ago, with five cents being the minimum (except electronic sales), and business had to round down to the nearest five cents – they were not allowed to round up.

OldEnglish on March 30, 2012 at 8:42 AM

Not that I care too much, but would it kill this blogger named Jazz Shaw to use proper punctuation and grammar? I certainly don’t always use proper punctuation, but I’d at least try to if I had to post on a major news blog.

For starters, put a comma after “Brother” in the headline!

Between garbage like this and the collection of Tina Korbe’s oh-so-insightful and informative posts, this site’s quality seems to be going in the wrong direction.

bluegill on March 30, 2012 at 8:43 AM

A dime for your thoughts?

search4truth on March 30, 2012 at 8:44 AM

So, logistically how does this rounding work? I’d assume that because sales taxes affect most retail purchases in this country that changing *prices* won’t eliminate the 1′s so the prices stay the same and the rounding would happen at the register, right? If that’s the case then there seems less opportunity for retailers to always round one way or another — the actual price would show up (in case you’re paying with check or credit card!) and then they’d have some stated policy that a 1 or 2 go down, 3 or 4 go up, right?

SoRight on March 30, 2012 at 8:45 AM

Between garbage like this and the collection of Tina Korbe’s oh-so-insightful and informative posts, this site’s quality seems to be going in the wrong direction.

bluegill on March 30, 2012 at 8:43 AM

There are hundreds of other sites. Exactly why are you posting at this one?

Yoop on March 30, 2012 at 8:46 AM

this site’s quality seems to be going in the wrong direction.

bluegill on March 30, 2012 at 8:43 AM

I agree – find somewhere else.

OldEnglish on March 30, 2012 at 8:46 AM

The elimination of the penny only applies if you are buying something using cash, does not apply to electronic transactions (i.e. debit and credit), and it requires retailers to round to the nearest nickel. Thus if it ends in 0,1 or 2 it gets rounded down to 0, 3, 4 or 5 get rounded to 5.

Canadian Imperialist Running Dog on March 30, 2012 at 8:46 AM

The reason for pennies or any other coins being metal in the first place is no longer valid. Time was the value of the coin was the value of its components. Since that day is long passed, why do coins still have to be metal? What if they issued plastic pennies that would be far cheaper to make?

radjah shelduck on March 30, 2012 at 8:47 AM

I’d offer my two cents worth but it would cost me 4.8 cents.

beatcanvas on March 30, 2012 at 8:47 AM

Bluegill, it always nice to be respectful when you are in somebody else’s place. Just saying.

bloggless on March 30, 2012 at 8:47 AM

Australia did this some years ago, with five cents being the minimum (except electronic sales), and business had to round down to the nearest five cents – they were not allowed to round up.

OldEnglish on March 30, 2012 at 8:42 AM

How would that be enforceable? Couldn’t the businesses just change their prices anyway?

jwolf on March 30, 2012 at 8:47 AM

When I was in the military in the late seventies and early eighties, the PX in Europe got rid of pennies, I believe around 1981 or 1982. Everything was rounded to the nearest nickle.

crosspatch on March 30, 2012 at 8:48 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. And good God, how did our grandparents get by in 1910, when the smallest denomination of money was a quarter.

There really is no reason to keep the nickel (manufacturing cost 9c last time I looked) around, either. People managed to get by, before we became Barack Hussein’s America.

MNHawk on March 30, 2012 at 8:49 AM

The metal used to make pennies is actually worth more than the penny itself. So the manufacture of pennies is now costing the US treasury for each one manufactured.

We could just go to an all-electronic currency…

Nethicus on March 30, 2012 at 8:49 AM

Living on an Air-Base in Germany in the 80′s it was the same way. Cost too much for the Government to ship pennies over to support the people there. The Base Exchange would round to the nearest nickle, giving the benefit to the customer.

If it could be made to apply only to cash transactions, I don’t see any reason why we couldn’t eliminate the penny.

It would be sad to see it go but, like you pointed out, it really isn’t worth the effort to not only manufacture the penny but to count them in the till or at the bank.

Dannic on March 30, 2012 at 8:50 AM

Between garbage like this and the collection of Tina Korbe’s oh-so-insightful and informative posts, this site’s quality seems to be going in the wrong direction.

bluegill on March 30, 2012 at 8:43 AM

Is a discussion of the money system of our country too complicated for you?

MNHawk on March 30, 2012 at 8:50 AM

Between garbage like this and the collection of Tina Korbe’s oh-so-insightful and informative posts, this site’s quality seems to be going in the wrong direction.

bluegill on March 30, 2012 at 8:43 AM

.
Thanks for your contribution to the decline, backbiter.

ExpressoBold on March 30, 2012 at 8:51 AM

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

jwolf on March 30, 2012 at 8:47 AM

The only thing they could was to increase the price to above the five cent mark, which then became five cents on rounding down. However, prior to the implementation of the change, most prices were posted as $xx.99, so they ended up losing four cents unless they went to the next dollar up.

OldEnglish on March 30, 2012 at 8:53 AM

We could just go to an all-electronic currency…

But how would you pay for something after the EPA shuts all the power plants down and there’s no electricity half the time?

You still need cash. Any country (e.g. Sweden) doing that is, frankly, dumb. You want a method of payment that works when the power lines or the communication lines are down.

crosspatch on March 30, 2012 at 8:53 AM

“Even if you shop a lot it sounds like we’re not talking much more than ten dollars a month.”

Soon to be just the rounding to the price of a gallon of gas, or a 5 minute charge for a Volt.

Yoop on March 30, 2012 at 8:53 AM

So, logistically how does this rounding work? I’d assume that because sales taxes affect most retail purchases in this country that changing *prices* won’t eliminate the 1′s so the prices stay the same and the rounding would happen at the register, right? If that’s the case then there seems less opportunity for retailers to always round one way or another — the actual price would show up (in case you’re paying with check or credit card!) and then they’d have some stated policy that a 1 or 2 go down, 3 or 4 go up, right?

SoRight on March 30, 2012 at 8:45 AM

If you drop the second decimal point that applies to the penny and nickel, no rounding would be necessary. There wouldn’t be separate systems for cash and debits.

Caustic Conservative on March 30, 2012 at 8:53 AM

Um…nobody mentions this…just how the hell are you going to make sales tax rates round off? If they do get it rounded off is the rounded off amount listed on my receipt so I can be refunded for overpaying my sales tax? What is the cost to retailers for putting in new accounting software and what gymnastics will it require to keep track of it all?

Limerick on March 30, 2012 at 8:54 AM

Caustic Conservative on March 30, 2012 at 8:40 AM

dollar coins won’t be practical until g-strings are made with coin slots.

DHChron on March 30, 2012 at 8:54 AM

Not that I care too much, but would it kill this blogger named Jazz Shaw to use proper punctuation and grammar? I certainly don’t always use proper punctuation, but I’d at least try to if I had to post on a major news blog.

For starters, put a comma after “Brother” in the headline!

Between garbage like this and the collection of Tina Korbe’s oh-so-insightful and informative posts, this site’s quality seems to be going in the wrong direction.

bluegill on March 30, 2012 at 8:43 AM

…b!tch…b!tch…b!tch!

KOOLAID2 on March 30, 2012 at 8:55 AM

Is a discussion of the money system of our country too complicated for you?

MNHawk on March 30, 2012 at 8:50 AM

I’m not an economist, and I have no idea about what would happen if we dropped the penny. If you’re so smart, why don’t you give your take on the subject. Don’t let me stop you. I’m sure you have a lot to add.

In the meantime, I’ll comment on the decline of HotAir’s quality when I feel it is appropriate.

bluegill on March 30, 2012 at 8:55 AM

At the PX, if it was 1 or 2 cents it was rounded to 0, 3, 4, 5, 6, 7 rounded to 5, 8, 9,0, 1, 2 rounded to 0. In other words it was rounded to the nearest nickle, up or down.

crosspatch on March 30, 2012 at 8:56 AM

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

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

Hey, Jazz Shaw! We have a thread-jacker. Ban her!

(Unless, of course, she is suggesting that Christie be “rounded up”.)

Yoop on March 30, 2012 at 8:58 AM

DHChron on March 30, 2012 at 8:54 AM

As a very famous comedian was wont to say: there’s no answer to that.

OldEnglish on March 30, 2012 at 8:59 AM

Let’s get rid of the nickle also!

thuja on March 30, 2012 at 8:59 AM

Limerick on March 30, 2012 at 8:54 AM

In Australia, GST is added to the sale price.

OldEnglish on March 30, 2012 at 9:00 AM

Makes too much sense to try here. Congress has important work to do. The Bobby Rush fashion statement. The testimony of Sandra Fluke and Trayvon’s parents to the Democrats. The only people interested in saving money are teabaggers and people in flyover country. Can’t be bothered worrying about pennies.

RickinNH on March 30, 2012 at 9:01 AM

Pennies!
Obamateurisms?
JugEars I’m sure had something to say yesterday that the Parroting Press didn’t miss.

KOOLAID2 on March 30, 2012 at 9:01 AM

why don’t you give your take on the subject. Don’t let me stop you. I’m sure you have a lot to add.

bluegill on March 30, 2012 at 8:55 AM

I did, boy. I gave a history of inflation as it relates to the coinage in circulation, plus opined to the elimination of the nickel, also. Try to keep up, son.

Now back in the cage you go, and please try not to fling your poo.

MNHawk on March 30, 2012 at 9:02 AM

The dollar bill is the single biggest drain on government production of raw cash right now. Stopping production of the dollar and replacing it with the $1 coin would save us a boatload of money (in the low billions if memory serves). A number of bills have been recently introduced to end dollar bill production in Congress, but they aren’t going anywhere. Crane & Co., the Massachusetts company that produces the dollar bill, has Scott Brown and John Kerry both firmly in their pockets, and before Brown they also had Ted Kennedy advocating for them.

However, that’s not to say the penny doesn’t have its problems too. The US Mint usually generates a profit due to seigniorage from circulating coins as well as sales of numismatic gold and silver coins. This year, however, they are likely to face a loss due to the high costs of production for the penny and nickel AND from the loss of seigniorage due to the suspension of the $1 coin program. Those interested in the numbers can read a breakdown here: http://news.coinupdate.com/cent-nickel-and-dollar-coins-chart-uncertain-future-1158/

Between garbage like this and the collection of Tina Korbe’s oh-so-insightful and informative posts, this site’s quality seems to be going in the wrong direction.

bluegill on March 30, 2012 at 8:43 AM

If all you want to read are posts talking about how wonderful Romney is all the time, you might consider going someplace else.

Doomberg on March 30, 2012 at 9:02 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

If we learned anything from movies it’s that fractions of a penny add up to millions. Does the customer win on this or just lose more?

Full disclosure, I almost always carry four pennies on me when I plan to make a purchase in cash so I can get nickels and dimes back with my change.

Ukiah on March 30, 2012 at 9:02 AM

Melt it down!

Jeddite on March 30, 2012 at 9:04 AM

Let’s get rid of the nickle also!

thuja on March 30, 2012 at 8:59 AM
****************************************************************

In the meantime, I’ll comment on the decline of HotAir’s quality when I feel it is appropriate.

bluegill on March 30, 2012 at 8:55 AM
Ha ha. This is like the Heisenberg Quantum Mechanics Principle.

Nobody mentions Hot Air’s declining quality until you comment on it, and Hot Air’s quality doesn’t decline until you comment.

blink on March 30, 2012 at 9:00 AM

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

KOOLAID2 on March 30, 2012 at 9:04 AM

That’s raaaaaycist!

/

franciscodanconia on March 30, 2012 at 9:05 AM

Between garbage like this and the collection of Tina Korbe’s oh-so-insightful and informative posts, this site’s quality seems to be going in the wrong direction.

bluegill on March 30, 2012 at 8:43 AM

You are right about Tina. It’s not that I don’t agree with her viewpoint. It’s that her perspective on many subjects is less insightful than an editorial in a high school newspaper. I try to avoid reading her. Unfortunately, she does write about issues that interest me, and so I do end up reading what she writes too often.

thuja on March 30, 2012 at 9:05 AM

In Australia, GST is added to the sale price.

OldEnglish on March 30, 2012 at 9:00 AM

So how here? Here cities, counties, states and now add fed sales taxes. Does anyone think our politicos are smart enough to coordinate all those into a simple calculation the doesn’t charge you more than what you are suppose to pay? Or is that the point. They can get more tax revenue ‘just becase’.

Limerick on March 30, 2012 at 9:05 AM

I think we can all agree this is Dr Pepper’s fault

DHChron on March 30, 2012 at 9:05 AM

They oughta just get rid of the DOLLAR. It’s now worthless, thanks to BEN BERNANKE.

mountainaires on March 30, 2012 at 9:06 AM

Once upon a time, when you put a quarter in a cigarette machine, you got your pack of smokes with 3 or 4 pennies taped to it.
Those days are long gone.
The Penny is a waste of money and a drain on the Mint and Treasury.
~(Ä)~

Karl Magnus on March 30, 2012 at 9:06 AM

There goes the Pennies from Heaven.

Yoop on March 30, 2012 at 9:06 AM

The magic happens and all communities are given their share of the collected tax. Enter the next common-good revenue sharing plan. You all know the communities that get $8m for their schools compared to those that get $100m are going to be jumping up and down and yelling “FAIRNESS”.

Limerick on March 30, 2012 at 9:09 AM

The Canadian Senate did a study in 2010 that recommended phasing out the penny and found that it shouldn’t have any inflationary effect. Now the government didn’t follow all their recommendations (the penny will be legal tender even after they stop making them) but the rounding to the nearest 5 cents will only apply to cash transactions, and only after the application of all sales taxes, not to the original prices.

Gamma Draconis on March 30, 2012 at 9:10 AM

Limerick on March 30, 2012 at 9:05 AM

Fed mandated GST on the way? Here, we don’t have state sales tax, instead, GST is redistributed among the states, based upon population.

OldEnglish on March 30, 2012 at 9:10 AM

Incidentally, I also disagree with the proposition to change the composition of the penny to steel. I think it should no longer be minted as a circulating coin and just be produced for collectors, the same way the US Mint still produces about 3.5 million Kennedy half dollars per year.

Doomberg on March 30, 2012 at 9:11 AM

Unfortunately, I’m more a creature of habit than not, and I look forward to Ed’s Obamateurism of the Day Monday-Friday. I assume Ed is off today? I trust everything is all right.

conservative pilgrim on March 30, 2012 at 9:12 AM

You are right about Tina. It’s not that I don’t agree with her viewpoint. It’s that her perspective on many subjects is less insightful than an editorial in a high school newspaper. I try to avoid reading her. Unfortunately, she does write about issues that interest me, and so I do end up reading what she writes too often.

thuja on March 30, 2012 at 9:05 AM

Does this qualify as irony?

Yoop on March 30, 2012 at 9:12 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

Between garbage like this and the collection of Tina Korbe’s oh-so-insightful and informative posts, this site’s quality seems to be going in the wrong direction.

bluegill on March 30, 2012 at 8:43 AM

So many others have so rightfully knocked your silly self around so I will come to your defense.
.
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There is no defense for some one as nutbally as you. Your guy is winning. More and more holdouts are coming around and you are still incapable of being happy. You puke all over the walls whenever you come here, then whine about not being taken seriously. You would fit in so much better at DKos or HuffPost. Yet you continue to get your kicks by being bashed by us Neanderthals. You are the person being thought of when the term masochist was created.

And take your grammar police ticket book and cram it where the sun don’t shine…sideways and in flames.

Bless your heart anyway.

cozmo on March 30, 2012 at 9:15 AM

Gonna be hell to pay at the 99-cent store.

coldwarrior on March 30, 2012 at 9:15 AM

233,000,000 consumers being dinged 2cents on ’rounded off’ sales tax at $1000 taxable spending a month….

$55,000,000,000 grab of private money by government.

Limerick on March 30, 2012 at 9:15 AM

Ah, if only these were the sorts of things we had to be concerned about.

Cleombrotus on March 30, 2012 at 9:17 AM

How ’bout we simply stop devaluing our dollar?

Also, what about the 75 billion or so pennies already in circulation? Does the treasury go through the time and expense to pull them all from circulation, or do they just stop making new pennies?

JimLennon on March 30, 2012 at 9:17 AM

You are right about Tina. It’s not that I don’t agree with her viewpoint. It’s that her perspective on many subjects is less insightful than an editorial in a high school newspaper. I try to avoid reading her. Unfortunately, she does write about issues that interest me, and so I do end up reading what she writes too often.

thuja on March 30, 2012 at 9:05 AM

Does this qualify as irony?

Yoop on March 30, 2012 at 9:12 AM

It’s not witty enough to be ironic.

gryphon202 on March 30, 2012 at 9:18 AM

It’s not that I don’t agree with her viewpoint. It’s that her perspective on many subjects is less insightful than an editorial in a high school newspaper. I try to avoid reading her. Unfortunately, she does write about issues that interest me, and so I do end up reading what she writes too often.

thuja on March 30, 2012 at 9:05 AM

Very much agree. A few more main bloggers, all at the same ability level as AP and Ed, would be nice. I don’t always agree with Ed, but it goes without saying that he is excellent at what he does. It would also be nice to see bloggers with different perspectives (maybe a libertarian, a national security/foreign policy hawk , a social con, etc.) debate the different issues and engage with one another more with rebuttals, etc. Tina hasn’t strongly established what she’s all about, even after all these months. From her it’s a lot of passive aggressive, wishy washy nothingness under sometimes-misleading headlines that seemed designed mostly for increasing page views.

Now, before I get accused of straying too far from the topic, let me say…

I love pennies. I would be so sad if they were to go!

bluegill on March 30, 2012 at 9:19 AM

bluegill on March 30, 2012 at 8:43 AM

You are right about Tina. It’s not that I don’t agree with her viewpoint. It’s that her perspective on many subjects is less insightful than an editorial in a high school newspaper. I try to avoid reading her. Unfortunately, she does write about issues that interest me, and so I do end up reading what she writes too often.

thuja on March 30, 2012 at 9:05 AM

Nobody can trash a woman as much as inadequate women.

Both of you fit that bill.

cozmo on March 30, 2012 at 9:20 AM

mountainaires on March 30, 2012 at 9:06 AM

Thread winner?

Cleombrotus on March 30, 2012 at 9:21 AM

There are hundreds of other sites. Exactly why are you posting at this one?

Yoop on March 30, 2012 at 8:46 AM

YES oh gilled one … found someplace else to spam impart your vast array of knowledge …. please …..

conservative tarheel on March 30, 2012 at 9:21 AM

I’m wondering, what are the consequences of getting rid of the penny for physical purchases but not for online purchases? Would paying with the credit card in person mean you could get the price rounded down to its real price while paying in cash means it gets bumped up to the next nickel value? Wouldn’t that force some other things into motion… such as additional taxes on online purchases because hey, you’re getting a deal! What else would this affect? What savings would we really get… because you know anytime we save money it’s just allocated to some other expense, so I don’t buy that we’re doing this to cut costs.

Ukiah on March 30, 2012 at 9:22 AM

Also, what about the 75 billion or so pennies already in circulation? Does the treasury go through the time and expense to pull them all from circulation, or do they just stop making new pennies?

JimLennon on March 30, 2012 at 9:17 AM

I think the existing pennies would eventually just disappear normally. Collectors and survivalists would vaccuum them up. Survivalists are already hoarding copper pennies and also nickels now. Do you see silver coins much anymore?

So, I think a lot of pennies will end up quickly disappearing into penny jars or just getting thrown into the trash and destroyed from wear and tear. I doubt the government would need to take action to remove them.

Doomberg on March 30, 2012 at 9:22 AM

If the penny is removed this will affect grocery stores. They like to charge $.99, $2.99, $4.99, etc. because even though the prices are really $1, $3, $5 using the next lower number and adding 99 cents gives the illusion of a low price. You’ll see this also in restaurants, fast food places, even department stores though a department store can still charge a shirt for $29 that’s really $30. With no pennies, grocery stores can’t justify $x.x9 prices anymore because they have to honor that price if someone pays in cash for the exact amount. There’s also the issue of sales taxes localities like to impose. Percentages of purchases do not all conveniently end in a 5 or 0. A one cent unit currency is a necessity.

hadsil on March 30, 2012 at 9:24 AM

When the retail value goes from 1.49 to 1.50, who gets the extra cent? What about sales taxes? They always come out to the penny, not to the nickel. Who gets the extra cents, the retailer? the state? the customer?

Sounds like a boondoggle.

CO2MAKER on March 30, 2012 at 9:25 AM

Between garbage like this and the collection of Tina Korbe’s oh-so-insightful and informative posts, this site’s quality seems to be going in the wrong direction.

bluegill on March 30, 2012 at 8:43 AM

Must be nice not having anything more serious to worry about than the quality of HA.

Cleombrotus on March 30, 2012 at 9:25 AM

When the retail value goes from 1.49 to 1.50, who gets the extra cent? What about sales taxes? They always come out to the penny, not to the nickel. Who gets the extra cents, the retailer? the state? the customer?

Sounds like a boondoggle.

CO2MAKER on March 30, 2012 at 9:25 AM

It’s not a boondoggle at all. It’s increasing the money supply without a corresponding increase in productivity, and is thusly a [relatively mild] inflationary pressure.

gryphon202 on March 30, 2012 at 9:29 AM

And take your grammar police ticket book and cram it where the sun don’t shine…sideways and in flames.

cozmo on March 30, 2012 at 9:15 AM

I would pay a thousand pennies for a ticket to that show.

Yoop on March 30, 2012 at 9:29 AM

Ok business men and women, call your IT departments and tell them to put in a system that rounds off all sales takes to the nearest nickle. Please post the time/cost analysis of getting your systems up and running again.

Limerick on March 30, 2012 at 9:32 AM

Did I read it right – Canada is withdrawing the pennis?

Archivarix on March 30, 2012 at 9:33 AM

cozmo on March 30, 2012 at 9:15 AM

LOL!

KOOLAID2 on March 30, 2012 at 9:33 AM

Sounds like a boondoggle.

CO2MAKER on March 30, 2012 at 9:25 AM

It used to be you could identify when your gas station ripped you off when the dial stopped just short of a cent mark, yet you got charged anyway. Now, with digital readouts, just who gets that extra 1/10 cent.

Never take your eye off the real ball.

/sarc

MNHawk on March 30, 2012 at 9:33 AM

Hell, let’s get rid of the nickel too. That way we could eliminate a decimal place altogether. We could simply say that something costs $7.3 or $19.9 and so on.

(The way inflation’s going – not to mention the Fed’s penchant for quantitative easing – the dime’s gonna be the new penny, anyway.)

TMOverbeck on March 30, 2012 at 9:35 AM

It must suck having to pretend to provide meaningful commentary on here since nobody respects your opinion.

blink on March 30, 2012 at 9:28 AM

Might I respectfully suggest:

It must suck having to provide your meaningless tripe here since nobody respects you.

She knows its meaningless tripe.

cozmo on March 30, 2012 at 9:37 AM

Dropping pennies will probably save everyone money. The reason I say this is: When’s the last time you saw something for sale for $15.00? Stores sell these items for $14.99, because the psychological effect of consumers seeing the “14″ in front and subconsciously thinking they are saving more than they really are. So if you do away with the penny, these items would more than likely be sold for $14.95 for the same reason. We just saved 4 cents! Granted stores will tweak other things to try and balance out any losses, but because of this phenomenon I’d argue we’d see more savings vs. more markups.

brainy435 on March 30, 2012 at 9:38 AM

Percentages of purchases do not all conveniently end in a 5 or 0. A one cent unit currency is a necessity.

hadsil on March 30, 2012 at 9:24 AM

Percentages of purchases do not all conveniently end in tenths of a cent either. That doesn’t mean we need a 1/10 cent coin. Nor does it stop taxation and gas prices from being in 1/10 cent.

If your total purchase is $54.74, and you pay in cash, you will be forced to suck it up and pay $54.75. That’s it. No more. No grand conspiracies. And if you are really upset at that 0.0183% price increase, pay by card.

MNHawk on March 30, 2012 at 9:38 AM

The military exchanges on base in foreign countries do not use pennies.

I didn’t miss them one single bit. Get rid of them.

And get rid of dollar bills too, they’re a waste of money and time. Dollar coins are all that’s needed.

NoDonkey on March 30, 2012 at 9:39 AM

You beat me to my point. Damn my glacial pace of typing.

brainy435 on March 30, 2012 at 9:39 AM

Why can’t they simply create the illusion by listing the prices as $0.95, $2.95, and $4.95?

blink on March 30, 2012 at 9:37 AM

Yes….comsumer confidence builder…illusionary pricing.

Limerick on March 30, 2012 at 9:39 AM

OK, for actual information, see page 11 of the 2001 US Mint Annual Report for actual audited numbers:

http://www.usmint.gov/about_the_mint/?action=annual_report

Now an explanation of what’s in the their annual report.
“Seigniorage” basically means “Profit” of revenue over cost. If it’s a negative number, the Treasury’s taking a loss on it. For per-unit cost, profit/loss, etc. just divide the gross cost and the seigniorage in dollars by the number of units shipped to the Federal Reserve Banks, i.e., the “Coins Shipments” row at the top.

The situation is actually MUCH worse for the nickel. Both the penny and the nickel cost more than double their face values to make.

Here’s how the process works, financially:

1. Mint buys metals and turns them into coins.

2. Mint “sells” them to the Federal Reserve at face value

3. If the face value revenue > than the cost, the “seigniorage” is turned over to the Treasury General Fund and defrays or offsets the need for federal borrowing (thus doing something to hold down the national debt)

4. But if the cost > face value, if that continues, the Mint, which is set up under a revolving “public enterprise” fund and is “supposed to” operate like a business and operate off its own income and is thus not appropriated funds by congress, winds up losing their shirt and may need to turn to congress for…drumroll…an appropriation…i.e, taxpayer funding which would INCREASE the need for borrowing.

In the late 1990’s/early 2000’s, it was not unusual for the Mint to turn over more a billion dollars or more in “seigniorage” over to the Treasury General Fund. Nowadays, as one can see from the annual report, given what’s happening with the penny and the nickel, it’s shrunk to a pittance.

It’s actually a rather serious financial situation for the US Mint.

Yiwen on March 30, 2012 at 9:41 AM

Ha ha. I don’t think she realizes how meaningless her comments are. That’s why people need to tell her.

blink on March 30, 2012 at 9:39 AM

This site is called Hot Air, if that means that Hot Air (or Hot Gas, depending on your preference) is on the site, bluegill’s posts fit the description.

22044 on March 30, 2012 at 9:42 AM

From the Philadelphia Inquirer:

Philly Deals: Geithner sees cash in coins’ metal

Like an old man with a cart picking up junk on Ridge Avenue, Treasury Secretary Timothy Geithner is trying to turn scraps of metal into cash.

Geithner wants to strip copper and other valuable metals from the Philadelphia and Denver coining lines that mint America’s small change. “Currently, the costs of making the penny and the nickel are more than twice the face value of each of those coins,” he told a House Appropriations Committee panel Wednesday.

Treasury wants a law that would give it the freedom “to change the composition of coins to utilize more cost-effective materials” without having to ask Congress for permission every time it dilutes the content of the national coinage.

Geithner didn’t specify in his testimony whether that means using plastic, aluminum, or other materials associated with carnival tokens. Or the old proverbial wooden nickel.

The U.S. Mint is researching alternative materials for all small change, said spokesman Mike White. “We’re in the early stages, with a variety of metallic materials,” he told me. Research on nonmetals would need congressional permission. “We have to deliver a report to Congress by the end of this year,” White said.

The Mint says nickels are currently 75 percent copper, 25 percent nickel. Pennies are copper-covered zinc. Metals prices are volatile, but they have been generally rising in U.S.-dollar terms as China, India, and other fast-growing countries use more, drawing speculators who bid prices still higher.

Geithner hopes that Mint manufacturing and administrative changes “will save more than $75 million” a year, starting next year. That follows December’s decision to stop making dollar coins after 1.4 billion of them piled up, unused, in Federal Reserve vaults.

The Mint employs 1,800 people, including 385 in Philadelphia, down from previous years. Philadelphia and Denver together produced about seven billion coins last year, down from a peak of 27 billion in 2000, due partly to lower demand for pocket change as more Americans use debit cards and other virtual money.

Yiwen on March 30, 2012 at 9:43 AM

Ha ha. I don’t think she realizes how meaningless her comments are. That’s why people need to tell her.

blink on March 30, 2012 at 9:39 AM

Remember that “girl” in high school? The one who would do anything to get the attention of the bad boys? The one the bad boys treated like dirt and she would lick it up because she thought it made her popular?

This is her diseased self all growed up.

And doing the same crap she did in high school, still thinking it makes her popular.

cozmo on March 30, 2012 at 9:44 AM

Jazz, Jazz!! You and some of the other commenters have fallen into the same trap as so many others. Ridding ourselves of the (costs more than it’s worth) penny would not cause merchants to round every item on their shelves up to the nearest nickel.

Prices would remain the same…. and then after you take your twenty items to the checkout counter, the final total would be rounded up or down – as needed. Don’t be taken in by Chicken Littles… Do you really think every thing in Walmart will suddenly be $10.00 instead of $9.99? I think not….

By the way, when was the last time you got that ‘one tenth of a cent’ change when you bought a gallon of gas for $3.899???

Pecozbill on March 30, 2012 at 9:45 AM

I always believed a 1% mark for our currency (the penny) is necessary. The real problem is inflation. In 1941, buying 8 gallons of gasoline for $1 seems like quite a deal, but when you are making only $17/month as a Marine Corporal, that is a lot of money.

People always talk about how cheap everything was decades ago, but a dime could be spent on a Saturday at the movies, or you could get a bottle of milk that filled five glasses. Our currency had power back then.

Now it’s just a joke.

Black Adam on March 30, 2012 at 9:46 AM

This site is called Hot Air, if that means that Hot Air (or Hot Gas, depending on your preference) is on the site, bluegill’s posts fit the description.

22044 on March 30, 2012 at 9:42 AM

I didn’t think a defense could be made for what blue gills does until you came along.
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And it still can’t.

cozmo on March 30, 2012 at 9:46 AM

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