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Obama Pushes For Cheaper Pennies
Hugh Pickens writes "Time Magazine reports that hidden deep inside in the White House's $3.8 trillion, 2,000-page budget that was sent to Congress this week is a proposal to make pennies and nickels cheaper to produce. Why? Because it currently costs the federal government 2.4 cents to make a penny and 11.2 cents for every nickel. If passed, the budget would allow the Treasury Department to 'change the composition of coins to more cost-effective materials' resulting in changes that could save more than $100 million a year. Since 1982, our copper-looking pennies have been merely coppery. In the 1970s, the price of copper soared, so President Nixon proposed changing the penny's composition to a cheaper aluminum. Today, only 2.5% of a penny is copper (which makes up the coin's coating) while 97.5% is zinc. The mint did make steel pennies for one year — in 1943 — when copper was needed for the war effort and steel might be a cheaper alternative this time. What about the bill introduced in 2006 that the US abandon pennies altogether.? At the time, fifty-five percent of respondents considered the penny useful compared to 43 percent who agreed it should be eliminated. More telling, 76 percent of respondents said they would pick up a penny if they saw it on the ground."
Oh no we can't have 9.99$! I am so confused if I see 9.95$...
The "annoying pocket change" is the only real currency we still have. You'd be better off scarfing up nickels - as many as you can - while they are still composed of nickel. Think pre-1964 silver dimes/quarters for comparison.
I'd rather just buy sheets of nickel or other metals with my debit card if I feel the need for it, which I don't.
I'm not much of a coin/metal collector.
And all our yesterdays have lighted fools The way to dusty death. --Will
Tangible money interacts with the human animal differently than abstract mathematical concepts.
Coins are the most tangible money, paper is more abstract, especially U.S. paper money that is all basically the same except for the numbers on it. Checks and credit cards are even more abstract - so much so that many people really can't handle them properly.
Back in the day when a quarter would actually buy something worthwhile, if you tossed a quarter to somebody, they got a different visceral reaction than if they saw a penny coming. Paper, too, caused a different reaction because it was all inherently more valuable than coin. A coin more naturally "feels" like something you can instinctively trade or equate with other tangible objects of value. It takes many years of playing "The Price is Right" before most people get that same relationship with abstract prices, and again, some never really do.
I don't think that a penny should cost $0.01 to produce, but I do think that there is real value in tangible coins that paper and credit cards lack.
3rd world monetary policy is that you? Also what would happen to all the cent's I hold in my bank account right now? I would lose all 98 cents! This is unacceptable. That could have been 98 hamburgers. See, I can still do Math! AMERICA FUCK YEAH!
Except how would that work with the rest of the world?
Prices in the UK would still remain the same as they are now, so they too would have to divide their currency in the same way.
Otherwise a leather jacket in the US might be $1, but £100 in the UK.
I don't see a problem with that, that same leather jacket is 10,000 yen in Japan.
other countries have nationwide sales tax regulations so that you still could use nationwide ads.
bickerdyke
In which case you pay $10.75 (if you pay with cash).
The penny is currently worth less (in terms of what it can buy) than the half-cent was when it was junked in 1857, it's worse than useless at the moment.
Not at all. You do all the math as normal, then round the final value. We already do that and have for decades. There's plenty of times where the price with sales tax doesn't come out to an even cent.
And FWIW, I won't pick up a penny off the floor. Or if I do, it's usually to throw it in the garbage because it's cluttering things up.
There is no -1 Disagree mod. Slashdot.org/faq defines mod options. USE IT.
In Germany we pretty much get 1 and 2 Cent coins. I don't know what countries are try to get rid of them.
http://www.mueller-public.de - My site http://www.anr-institute.com/ - Advanced Natural Research Institute
We also ditched $1 and $2 paper currency for $1 and $2 coins. That was also a good move in getting rid of those ratty dollar bills. The US cold easily do the same thing as you already have $1 coins in circulation. About the only people who will notice a change are the strippers who will now have use their coin slots.
The dollar coin in the U.S. has been a red headed bastard stepchild of the currency, rarely used and considered stranger than a $2 bill.
I think we should put out $2, $5 and even $10 coinage, but most of the U.S. seems to be moving to a plastic-credit based currency, with all the attendant privacy and fraud issues, as well as being managed by the private sector instead of the government. Is that a good thing, or a bad thing? I'd say: yes.
Because it currently costs the federal government 2.4 cents to make a penny and 11.2 cents for every nickel.
I have absolutely no sympathy for the government in this regard. At one point the US was on the gold standard. (That was after it got off the wampum standard and the tobacco standard.) At that time the $20 gold coin cost $20 to make, by definition. (Actually, just a little bit more because of seigniorage.) The dollar was defined as a certain weight of a certain purity of gold. The coin was merely the government's guarantee of the weight and purity. However, the government decided to finance part of its spending through inflation. Since you can't do that while on a gold standard (other than through new gold discoveries or processes) they had to do away with it.
The government likes inflation because 1) they get to spend it first, 2) they get to pay their debts with worth-less money, and 3) tax bracket creep allowed them to increase tax rates without voting for them. (This last one has since been eliminated by indexing tax brackets to inflation, but it was a major component for many years.) First they inflated the money supply, and the gold in the gold coins became worth more than the face value, and the gold coins had to go. They continued inflating and the silver in the dollar, half-dollar, quarter, and dimes became worth more than their face values, so the government had to find something worth less to make them out of. Now they have continued until the nickel and penny are worth more than their face values.
I, for one, think it's time for the government to stop financing their spending through inflation.
~Loyal
I aim to misbehave.
...if your concern is holdings that won't wax and wane with the money markets, why not purchase commodities like gold or silver?
It's not really my concern, but, looking at the "value" of gold from 1975 to the present, I'd rather keep my savings in an imaginary construct like the U.S. dollar invested in a mix of index funds and bond issues. When that system collapses, everyone scrambles to prop it back up again, when the value of gold stagnates and declines in real terms for decades at a time, the world yawns.
other countries have nationwide sales tax regulations so that you still could use nationwide ads.
So? An ad can easily carry a disclaimer (in small text if preferred) that prices in store will be higher due to taxes. What's infuriating is when you go to, say, a food store that is advertising a price on a blackboard for something and where you're charged more than that when you actually try to buy the item because of taxes. It's not that the staff in the store couldn't put the price inclusive of tax up; it's only advertising to people in that particular store and it's just a blackboard that they rewrite every day or two anyway. (Anyone putting a store across a taxation boundary is going to be in for complex pain, but that's true even without the requirement to display true prices.)
Show the real price so I can figure out how much cash to get out of my wallet. I don't really care what the store's cut of that is (or how much goes to their suppliers or their bank for their overdraft) and how much goes to the government, not by comparison with ensuring that I spend the right amount and only try to purchase goods and services that I have the money for.
"Little does he know, but there is no 'I' in 'Idiot'!"
I don't understand, maybe it's the cultural chasm between American and Europe, but what's wrong with paying a 40 cent charge with 4 dimes? I'm under the impression that a "dime" is equivalent to 10 cents, right? So 4 dimes would cover the "40 cent" toll charge. Why do you need all kinds of different coins, or even paying more than you're asked ("two quarters")? Are "dime" coins uncommon?
not that the staff in the store couldn't put the price inclusive of tax up
They can't. This is a consequence of the need to remain competetive. When we walk into stores we expect to see prices that don't include tax. A well-meaning store that tries to break from this and include tax in the price ends up looking way more expensive than its competetors, even though in reality it is not. Even if you include "taxes included!" on the sign there is a subconscious bias in the customer's mind against these seemingly high prices.
No, until every store is forced to do the same and include taxes it won't work. It's an unfortunate consequence of human nature.
Which is ok. Sometimes taxes go out to tenths of a penny but it doesn't cause any issues. Really we should drop the penny and the nickel. Just go the the next tenth; dimes. I believe there used to be mils that were tenths of a penny and we don't fret about it today.
Could produce something, that is worth LESS than the cost to MANUFACTURE it!
Added bonus: no more counties/states saying "well we'll add an 0.1% sales tax to pay for Mr. Multibillionaire Asshole and his collection of multimillionaire thug asshole ball-tossers to have a stadium and yet still charge $75 a ticket for people to watch them throw a ball around."
I don't see this doing anything but increasing prices. Ignoring that I'm already under a lower local sales tax, take that $9.99 item. Add your sales tax, you get $10.69. Retailers will round up to $10.99. Congratulations, you've just created a 10% sales tax.
Benford's Corollary to Clarke's Law: "Any technology distinguishable from magic is insufficiently advanced."
If you get rid of the nickel, you essentially need to get rid of the quarter. You need to have all larger denomination coins divisible by at least one of the smaller denomination coins. Unless, of course, you are a sadist. Getting rid of the nickel seems like a non-starter. However, dumping the dime w/o getting rid of the nickel would probably work.
What I see on the shelf is exactly what I pay.
That is kind of the point of a nationwide identical tax on things, allowing stores to write out price stickers showing exactly what you're paying without having to calculate which part is tax etc.
Hence the comment further up about stores being forced to write out what you have to pay, not what the base price is, when targeting 'civilian' customers.
This whole thing America has with having to manually add taxes and tips at restaurants is a real head-shaker for many Europeans. We only give a tip if we've been treated above and beyond the ordinary, since the serving staff at a given restaurant actually collects a paycheck. You should try that system sometime. :-)
-=This sig has nothing to do with my comment. Move along now=-
So... let me get this strait, in order to save $100 million our government can either:
A. Build 1 less tank/fighter jet
B. The president could stop using his own private Jet
C. We could delay invading Syria / Iran (whomever's next) by about 4hrs
D. Completely overturn the way our currency has functioned for over 200 years.
and we're choosing D?
I'm European and in NYC for the first time this week. It's astounding how many people expect a tip for what is mediocre or poor service (or at least would be back home) because of the "social contract". If people expect me to pay a tip no matter what, it would be easier to just pay them properly, charge a little more, and pay tips to people who actually deserve them.