« Surging to Delicious | Main | True Crime » Dump the Penny25 Mar 2008 03:01 pm
The case against the penny, made by David Owen in The New Yorker, is compelling. It needs to be abolished. Isaac Chotiner's on board as is the mighty blog king Sullivan. Bill Safire was beating this drum years ago. You shall not crucify mankind upon a cross of zinc! Photo by Flickr user fuzzbabble used under a Creative Commons license Comments (58)
I dump it all the time. Seriously. Every time I get change, I segregate the quarters for laundry, put the dimes and nickels in a jar, and throw the pennies away. I freaking hate cashiers that give me a quarter, two dimes, and four pennies change when something costs X.51, though I realize they have probably have jackass managers who will ream them out if their drawer is off by a penny. 
It's a stupid idea. As Roddy points out, prices will just get rounded up (whether the penny should be made out of zinc in another story). And throwing pennies away is stupid. I just put them in my red plastic "C" from Commerce Bank, along with my dimes and nickels (quarters I hold onto because they are useful for laundry and parking). Then when the "C" fills up, I take it to the free Penny Arcade at Commerce and exchange it for cash.
I freaking hate cashiers that give me a quarter, two dimes, and four pennies change when something costs X.51 Easily resolved by keeping a few pennies in your pocket to account for these sort of contingencies. By actually using my change when I buy something, I've managed to keep coin-accumulation to a minimum. Try it! It just requires mastery of basic arithmatic!
My kids love to throw pennies in fountains. I save up all my pennies and then carry big bags of them to the mall, where my kids can go crazy throwing them all in the fountains. It's actually cheaper and more fun than Chuck E. Cheese.
Think could still be priced in penny increments and the rounding could be done at the cashier. This would cost people 4 cents a transaction at worst. Banks and investment houses do transactions at fractions of a cent and get along fine.
There's a great organized crime opportunity here, the copper coating and zinc core of a penny are worth well over 1 cent (1.4 last I checked, but that was before recent commodities increases.) To fight the temptation to make a 40% return - extraction costs, it's illegal to melt down more than 10000 pennies. I'm waiting for someone to be busted with a boat full of pennies as part of a penny extraction crime ring.
I like my pennies. When you throw 'em on the street, I pick 'em up. The majority of people still don't want pennies abolished. When it comes to something so small, what's the big deal letting most folks have what they want? Maybe it's a generational thing. (Pennies were worth somethin' in my day, I tell ya!) If so, just wait awhile 'til opinion shifts (or us over-50s die), and you'll get rid of 'em. All in good time, all in good time.
But you know all those odd cents are going to be rounded up, not down... It doesn't need to be rounded at all. Before the Euro, the Dutch had taken the 1- and 2-cent pieces out of circulation. The prices were still listed in cents, but the total was rounded up or down to the nearest 5 cents if you paid with cash. (The Euro restored 1- and 2-cent coins, alas, and also led to the demise of the beautiful Dutch banknotes.) Also, get rid of the fucking dollar bill already, and get people used to a coin you buy things with, instead of having to deal with rolls of quarters for parking meters.
The case for getting rid of the penny was strong 20 years ago. Now it's stronger. It's pretty hard to find a coin in the world that's worth less than a penny.
I don't see how you can have billions of transactions priced to the cent and have no currency to conduct those transactions. Would electronic transfers also be rounded up? If the penny is of such low value why not revalue all currency up? Have one new dollar equal five old dollars, etc.
It needs to be abolished. A political non-starter. Conservatives won't do it because, well, change is not conservative. Nor is getting rid of change conservative. Big bills; folding money; long green - that is conservative. And libs won't do it because they are afraid to look weak on national coinage. In any case, pennies are part of the American story, and we can no more disown them than we can disown my grandmother, who kept a large jar filled with pennies and occasionally pelted irritating personages of dissimilar ethnic background with them. That said, just as it took Nixon to go to China, maybe a quasi-conservative convention-defying maverick could abolish the penny... just part of the emerging case for McCain!
To fight the temptation to make a 40% return - extraction costs, it's illegal to melt down more than 10000 pennies. I'm waiting for someone to be busted with a boat full of pennies as part of a penny extraction crime ring. Well, it'll probably be a prominent Democratic politician who was ratted out by the foundry for melting down 9000 pennies several times, and then busted under the Federal Cobbler's Apprentice Act of 1873 on a charge of unlicensed shoe repair.
Try it! It just requires mastery of basic arithmatic! Yeah, but it makes my pockets jingle, and I hate that.
Here's a solution that doesn't require the government to abolish anything: Have sales tax collected from the consumer only in five-cent increments--there's no sales tax until the sales tax would be 5 cents, and then no additional sales tax until it would be 10 cents. Retailers would not be required to price things in five-cent increments, but most of them would catch on quick and eliminate their need to accept or dispense the penny. Sales tax is collected by the government, I'm pretty sure, based on gross receipts--you could continue that unchanged if you wanted to make small businesses eat the tiny difference, or you could give them a small break to compensate them for the loss. It would probably be more politically feasible to do the latter--you could even sell it as a tax cut, though the revenue impact would be minuscule. This plan would have all the benefits of virtually eliminating the penny from everyday use without getting the nostalgia buffs all up in arms.
What the heck has happened to the liberal blogosphere? You're supposed to be arguing that when the big Bush-caused deflation depression comes, you're going to want your pennies. :-)
What the heck has happened to the liberal blogosphere? You're supposed to be arguing that when the big Bush-caused deflation depression comes, you're going to want your pennies. :-)
Any time you can regularly spot coinage lying on busy streets--implying most people can't be bothered to stop, bend over, and pick up that amount of money--you know it is time for it to go. But no, it won't happen, because people are way too sentimental about this sort of thing.
What the heck has happened to the liberal blogosphere? You're supposed to be arguing that when the big Bush-caused deflation depression comes, you're going to want your pennies. :-)
What really needs to be abolished is the dollar bill, we have dollar coins, we waste millions printing the paper bills.
I avoid using cash wherever possible (pretty successfully - money in my wallet has likely been there for weeks if not months). Pennies are rarely an issue to me, but I do use them when I pay cash to avoid over-accumulation of coins. What will eventually kill the penny will the the hyperinflation on the way during the Dubya economic crash we are just starting on. The quarter may survive if we're lucky, but the penny, nickel and dime will be toast.
Couldn't agree more. And on the rare occasions I use cash, I do what Seitz does - either give them back to the cashier or throw them away. Dealing with pennies costs far more than they are worth, to say nothing of the idiocy of spending a nickel to make one.
Couldn't agree more. And on the rare occasions I use cash, I do what Seitz does - either give them back to the cashier or throw them away. Dealing with pennies costs far more than they are worth, to say nothing of the idiocy of spending a nickel to make one.
Nobody here seems to think the penny can be eliminated (and a surprising number want to keep it). But why is this so? Many countries have eliminated their equivalent of the penny. And New Zealand already is talking about eliminating their nickel. What is unique about America that we can't do the same? I really don't have an answer. But the answer probably says something interesting about us.
"What really needs to be abolished is the dollar bill, we have dollar coins, we waste millions printing the paper bills." You ever try sticking a Susan B. Anthony dollar in an exotic dancer's g-string?
Nobody here seems to think the penny can be eliminated (and a surprising number want to keep it). But why is this so? Many countries have eliminated their equivalent of the penny. And New Zealand already is talking about eliminating their nickel. What is unique about America that we can't do the same? I really don't have an answer. But the answer probably says something interesting about us.
What is unique about America that we can't do the same? I seem to remember all of these other countries converting to the metric sysetm, except for the U.S.
Sales tax is collected by the government, I'm pretty sure, based on gross receipts It's actually collected transaction by transaction, which is why it's considered a transaction tax, and not a gross receipts tax. Primarily this is because not all sales are taxable (how do you tax Amazon on gross receipts, for example?). Some states tax food at different rates, or don't tax food at all. If you have a grocery store that sells food and sundries, you have to keep those sales separate, for example. When it's reported on a return, you're right that the total sales, exempt sales, and taxable sales are listed, but you have to maintain documentation for pretty much every transaction, including invoices, exemption certificates, etc. And if you don't keep that documentation, you're screwed if you get audited (and when I say you, I mean your business, not individually). And that goes for both sales AND purchases. When they come to audit, they don't just make sure you're collecting the right amount from your customers. They're looking to make sure you've paid the right amount of sales tax to vendors on YOUR purchases, and if you haven't, they want to make sure you've coughed up the right amount of use tax. And to bring it back to the transaction level, when they audit, they do it by sampling. They look at either a block(s) or statistical sample of sales and purchases, test those transactions, and extrapolate a liability (or credit in rare cases). The tax is on each transaction. Sorry for the digression, but this is my living. Exciting, I know.
"You ever try sticking a Susan B. Anthony dollar in an exotic dancer's g-string?" Fred, that has to be the most intelligent comment you've ever made. And it is a point that I have obviously overlooked.
Don't be such a cheap bastard, Fred. Or maybe go to higher-class establishments.
Please, dump the penny, and most other coinage while you're at it. Maybe quarters are OK to keep, for parking meters and laundromats and so forth. But what is more annoying than coinage? Too much in your pocket and it weighs down your pants. It falls out of your pockets into seat cushions. Handle a bunch of it and your hands smell funny. Thorough waste of space in every regard. Back before I knew better I would sweep pounds of accumulated pennies off my nightstand into the garbage can just because I didn't have anywhere to put them, and rolling the damn things is just not worth the effort. Now I dump them straight off when I get them, or pitch them in the take-a-penny jar at helpful places. Same reason why the dollar coin never took off compared to the bill. Coins just suck. Maybe it was worth it back when you could buy a meal or a pack of smokes or a few gallons of gas with a fraction of a dollar, but now?
to Fred's comment: imagine the alternative slots. There could be a whole new set of stripper skills to learn! Or will we just go to the $2 bills (again).
As the New Yorker article points out, we elimnated the half-penny back in 18-something (when, inflation-adjusted, it was worth well over 10 cents today). Somehow we surmounted the enormous logistical challenges of pricing everything to the nearest cent. I imagine we could also figure out how to start pricing things to the nearest 5 cents.
where did Safire find the time. weren't all his energies devoted to proving the Mohammad Atta-Saddam Hussein intel in Prague connection? Conducting a yellow journalism crusade and inveighing against the penny...a man of many talents.
As SP points out, Fred your cheap, with inflation you should be giving them $5s.
Apropos of this, there was a recent article (can't recall it and it didn't come up in my quick google) that advocated abolishing the $100 bill, which appears to be the preferred denomination of counterfeiters, money launderers, and few others.
A meta-point: You can use credit cards almost everywhere today. I do. Some parking meters in Manhattan now take credit cards. So does McDonalds. And Starbucks. If you only use cash where you have to, you'll have far less change to worry about.
"Apropos of this, there was a recent article (can't recall it and it didn't come up in my quick google) that advocated abolishing the $100 bill, which appears to be the preferred denomination of counterfeiters, money launderers, and few others." The preferred denomination for counterfeiters has always been the $20, IIRC -- it's the largest bill that doesn't get additional scrutiny at the cash register.
It's worth noting that Obama's economic advisor Austan Goolsbee has floated a plan to stop minting nickels and simply declare pennies to be worth five cents, thereby killing two birds with one stone while indirectly giving a tax credit to the sorts of people who have big jars of pennies lying around. If I weren't already going to vote for Obama, I would now, just to watch Wolf Blitzer try to wrap his head around this level of abstraction.
Here in L.A. a dollar is still the standard tip when sitting at the rail. Strip clubs could easily hoard a bunch of $2.00 bills to give as change, and the girls would get a tip increase in the deal, too. What do they do in Canada?
I agree, and while we're at it, let's get rid of the damn nickel too. Make dimes the 'new penny', and do everything in increments of $.10. Would make everything easier.
See wikipedia on "superdollar" -- the $100 bill appears to be the choice of counterfeiters with access to technology . Easy to transport and use as a medium of exchange overseas. In the US, a $20 bill would certainly pass far easier than a $100.
As a former retail worker, I bear witness to the fact that, yes, the boss does ream you when the till comes up short or high, and those pennies add up. It all goes back to basic accounting, and there isn't an entry for "ditched pennies". As Tyro said, try supplying correct change. Arithmetic, it's not just for kids. Can't stand change jingling in your pockets? This place must be a sausage factory. You'd never hear this bs from women.
As the New Yorker article points out, we elimnated the half-penny back in 18-something (when, inflation-adjusted, it was worth well over 10 cents today). Somehow we surmounted the enormous logistical challenges of pricing everything to the nearest cent. I imagine we could also figure out how to start pricing things to the nearest 5 cents. We also eliminated the 2 cent piece, 3 cent piece (silver, smallest US coin ever), the 20 cent piece, 2 dollar bill, 500 dollar bill, and the 1000 and above bank notes that were mostly used in intra-bank transactions before the electronic age. And all the various denomination gold pieces. The penny should go. The dollar coin come back with a portrait of the handsome younger Washington - not the old toothless Gilbert Stuart Washington, certainly not some marginal in US history, PC-approved, bitch on it. Give blacks their "Saint Martin" half dollar - then when all the nasty stuff in Saint Martin's FBI file is finally released, swap out him for some other distinguished minority. We need a 500 dollar note to compete with the 500 Euro note. Or maybe the way things are going, a thousand dollar note to compete with the Euro. Cyberwar makes it likely we will never have a "true cashless" transaction system. Wait until the Islamoids or the Chicommies penetrate and do an attack on electronic banking and people have to use cash again as the safer choice. It is always good to have cash as a contingency. Also, cash is still preferred if you are doing something you want some privacy about, rather than the instant credit card trail government functionaries can access on each and every transaction you did...Cash will always have it's place with any smart person in biz, in what they wish to leave a record of purchasing or not.. And obviously, high volume goods, commodities, and services should remain with 1/100th of a dollar denominators. Otherwise the market is too warped from real value - a share of Acme Magnet Co. is 1.12, NOT 1.15. A pound of iron ore is really worth 14 cents if the market makes it so, not rounded up to 15 cents or down to 10 cents.
You gotta admire how Chris Ford can stay on message, managing to work antifeminism and racism into a thread on the penny.
This is an awesome idea.
You gotta admire how Chris Ford can stay on message, managing to work antifeminism and racism into a thread on the penny. People like that can't *not* talk about their prejudices.
Re: You ever try sticking a Susan B. Anthony dollar in an exotic dancer's g-string?" In Canada the strippers often have a little bowl for people that want to tip with $1 and $2 coins. You only get direct flesh contact if you're willing to part with a five or higher. Given the affects of libido, and usually alcohol, the strippers benefit from dollar coins. Re: Wait until the Islamoids or the Chicommies penetrate and do an attack on electronic banking and people have to use cash again as the safer choice. The banking system already has enough redundnacy built in that it can survive as long as it has power. Neither 9-11 nor the 2003 blackout crashed the system.
Why stop at the penny? Gregg Easterbrook has been pushing abolishing the penny, nickel and dime for a while.
The Euro restored 1- and 2-cent coins, alas, and also led to the demise of the beautiful Dutch banknotes. You didn't have to do that. Finland doesn't use 1 and 2 cent coins, 5 cents is the smallest. The legal loophole that allows us to do it was that we only needed to *mint* a huge load of 1/2 cent coins and make them legal tender... but there was nothing to stop us from making it illegal for vendors to return 1 or 2 cent coins and making up other silly rules to take them out of the circulation. Electronic transactions don't get rounded to 0.05, they're charged down to the cent.
There's a certain aesthetic beauty to being able to throw around a large number of bills which we would lose if we converted entirely to $1 coins. However, we could convert to $1 and simply make the $2 bill more common for use when tipping strippers, cab drivers, and putting bills in the collection plate. I don't know why the $2 bill doesn't get more love.
Dump the one-dollar bill, too. We pay for things with paper that we used to use a nickel for. One thing that might redeem the penny is if it were somehow very cheap to make (say 1/3 of a cent). Because so many people keep huge jars of pennies, the hording of cheap pennies would in effect be a good revenue stream for the government. Apparently the federal government has netted $5 billion from people "buying" state quarters and keeping them rather than spending them. Getting rid of the cent could be facilitated by losing the whole 1/100th system. Change to the "shilling", 1/20th of a dollar.
There's a certain aesthetic beauty to being able to throw around a large number of bills which we would lose if we converted entirely to $1 coins. Not when you realise they're all singles, though. There's something pretty annoying about having a wallet bulging with bills to find out they're all oncers. The wallet is where you're supposed to head for big money, not three-quarters of a euro. You ever try sticking a Susan B. Anthony dollar in an exotic dancer's g-string? Uh-huh. Strip clubs have learned from cheap bastards like Fred, and are now taking over from 'your grandad' as leading distributors of the $2 bill, by offering it in change. Point is, coinage in the US is basically 'what you get from a transaction', not 'what you give for a transaction'. Elsewhere in the developed world, you can in fact buy beer and coffee and other small items with coins. The resistance that Americans have to the prospect of a 'pocket full of change' is because they're not used to spending it. That actually changes, pardon the pun, when you realise it's worth something.
Easily resolved by keeping a few pennies in your pocket to account for these sort of contingencies. The average hourly wage in the US is $19/hour, a little more than half a penny per second. If it takes 2 seconds to deal with a penny, most people are better off losing it.
Here are all the obsolete non-gold coins of Half Cent (1793-1857) Most Americans have never seen most of these coins. Some of them are really bizarre. How would you like some good investment advice? Hoard your pennies. Pick them up off the ground.
Just double the value; make every penny worth 2ยข. It would cause a small amount of inflation, but probably no more than would rounding up every transaction to the nearest nickel. It would solve the minting problem, and you would only have to round transactions 2% of the time (.01 & .03 couldn't be done, but no one would lose if everyone rounded both to .02).
Here's another wacky idea, while we're at it: how about making the dollar (and the penny) worth more by eliminating the Fed's dual mandate of seeking price stability and full employment and just let it focus on price stability?
Well Fred, I don't like the idea of persistent recessions. Inflation, at low levels, is a great way to get around wage friction(People have irrational psychological aversions to absolute decreases in compensation. By simply increasing wages at a lower rate then inflation, we can avoid a good part of the unemployment and inefficiency that such irrationality causes). At higher levels, inflation can have devastating consequences, but so do recessions. We must weight the dual concerns of inflation and economic growth(and associated unemployment) in order to guide economic prosperity.
Comments closed April 08, 2008. |
Search
Subscribe to this blog by Email Books by Matthew Yglesias
Recent Comments
Recent Posts
Weekly Archives
Categories
|
Copyright © 2007 by The Atlantic Monthly Group. All rights reserved.
| 
Heads in the Sand
The penny is totally a nuisance. But you know all those odd cents are going to be rounded up, not down...
Posted by Roddy McCorley | March 25, 2008 3:13 PM