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Death To Pennies

Sounds like a good idea to me:

H/T: Marginal Revolution

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About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May, 2010 and also writes at Below The Beltway. Follow Doug on Twitter | Facebook

Comments

  1. john personna says:

    Saw that, and as I commented there, death to the paper dollar as well.

    Actually I used the moment there to comment on the obvious brokenness of it all. Why hasn’t Congress done these things already? Killing the penny (and paper dollar) are completely rational and economic. Keeping them is entirely emotional.

    If they can’t handle this, what can they do?

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  2. The most inexplicable move I’ve seen in years are the repeated attempts by the Feds to make a dollar coin popular while at the same time keeping the dollar bill alive. As the Canadians showed us, the only way to make that work is to stop printing dollar bills and gradually retire them from circulation.

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  3. @Doug Mataconis: Yup. Why this isn’t obvious is a head-scratcher.

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  4. @Steven L. Taylor:

    A possible answer can be found in this anecdote about the eternal dollar bill v. dollar coin debate

    Lobbyists and industries with ties to the money-making industry are also weighing in. Massachusetts Sen. John Kerry has introduced a bill to do away with dollar coins (the current Susan B. Anthony versions). Paper for U.S. currency is made by Massachusetts-based Crane & Co.

    It’s also been reported that the reason why Congress has previously rebuffed efforts to eliminate the dollar bill is due to the influence of the Massachusetts Congressional delegation, and especially Senator Kerry and, when he was alive, Senator Kennedy.

    I would imagine there are copper and zinc mining interests in the Western US that have an opinion on penny elimination.

    It’s always the same, isn’t it?

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  5. John Peabody says:

    Just five minutes of Wikipedia research on coinage, inflation, and the cost of pennies (a penney’s metal is worth more than a penny, let’s start with that) would convince anyonepennies and paper $1 are nuts.

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  6. Neil Hudelson says:

    @Doug Mataconis:

    Another factor to success is not making the dollar coin almost the exact same friggin size and weight as the quarter. (One of the definite reasons the Susan B. Anthony dollar is a complete fail.)

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  7. tps says:

    @Neil Hudelson:

    The newer dollar coins with the gold/brass color and smooth edge do help somewhat.

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  8. JKB says:

    Well, if they would quit debasing the penny, then it would buy more as the price of copper went up. Plus, the average citizen would learn about commodities, inflation, and doing math to value the penny at transaction time

    The loss of the paper dollar has more than printing interests against it. For one, ten $1 coins will drag your pants off or weigh your purse down, whereas the same quantity of $1 bills does not. Earlier dollar coins failed due to the cost of accommodating them. The shipping costs to businesses and banks. I believe I read Walmart was a big factor in the last failure as the cost of shipping the coins proved to make their adoption costly to business so they didn’t order them up from the banks. In the past, but easier to accommodate today was vending machines. And last but not least, there is no place for them in the cash drawer. Perhaps the death of the penny would open up a spot?

    This last, installed infrastructure is why the US going metric is problematic. Under the Clinton Administration, then Secretary of Commerce, Ron Brown, decreed that Commerce was going metric right down to the paper and forms. This died a quiet death as they never allocated the funds to replace all the file cabinets that wouldn’t accommodate A4 paper. In a hundred or two years, this problem will go away as almost all new file cabinets and paper trays are designed to accommodate metric paper sizes (and the smaller US sizes.)

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  9. Ben says:

    I’d be happy with doing away with all change smaller than quarters at this point.

    As for dollar coins, my biggest problem is that I absolutely HATE carrying around a large amount of coins in my pockets. I hate the weight, I hate the constant jingling-jangling, and I am not about to start wearing a man-purse just to carry the things.

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  10. john personna says:

    @JKB:

    Well, if they would quit debasing the penny, then it would buy more as the price of copper went up. Plus, the average citizen would learn about commodities, inflation, and doing math to value the penny at transaction time

    Ah, I don’t think this would push through to the currency as a whole. No, a copper penny does not make a “copper standard.”

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  11. john personna says:

    (I don’t think the current $1 coins are too heavy, but certainly you could trade back for $5 bills at the register.)

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  12. rodney dill says:

    Well, if they would quit debasing the penny, then it would buy more as the price of copper went up

    A penny is only about 1 to 2% copper, since 1982. They’re zinc with a copper coating. Which is why they corrode so bad anymore. Pre-1983 ones are copper (actually bronze) and worth more than a penny.

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  13. MarkedMan says:

    It’s not as clear cut as everyone thinks. Although the math seems obvious (coins cost 5 times as much but last 20 times as long) there are other factors. For instance, there is a significantly increased cost of transportation. Warehousing coins also is more expensive as they take more room and require somewhat more delicate handling (so as not to break the rolls). And, perhaps the clincher, dollar bills are difficult enough to counterfeit that they are not worth the effort. But dollar coins would be relatively trivial to counterfeit and very difficult, if not impossible, to recognize. While it is true that no one would bother to counterfeit dollar bills, it may be very worthwhile for someone to counterfeit coins. There are lots of criminal businesses such as credit card fraud, that has a lower ROI than 200%.

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  14. MarkedMan says:

    i forgot to mention in my post above about the interest cost. The cost of making those four times as many dollar bills is spread out over 30-40 years. The cost of making those coins are incurred in year 1. The cost of money (no pun intended) would indicate that if inflation and borrowing costs are more than a few percent (very likely), the dollar bills come out ahead. (It’s more complicated than that, but those are the types of things you need to consider.

    But the most important reason not to do away with the dollar bill? I am a man. I carry a wallet, not a change purse. I hate change. I hate going to Europe or Britain and having all those heavy coins jangling around in my pocket. They have two euro and two pound coins, so it is even worse.

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