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."

Comments

Re:You can't eliminate them

[rioki]

Oh no we can't have 9.99$! I am so confused if I see 9.95$...

Re:You can't eliminate them

[bickerdyke]

other countries have nationwide sales tax regulations so that you still could use nationwide ads.

Re:Not sympathetic.

[ihavnoid]

I'm not sure if you understand basic economics, but a world without inflation would be much worse. The main purpose of inflation is to encourage people to spend money, or at least, save it in a bank, rather than keep the money in your closet. Once there is no inflation, or even a small amount of deflation, it acts as a positive feedback - as the value of money increases, people tries to get hold of more cache, and that reduces the total supply of cash within the society, and it further increases the value of cash. Eventually, all spending dries up, jobs will disappear (since there is nobody who's trying to by ANYTHING), and the poor guys will suffer more seriously, since the rich guys (=people with lots of cash) will have their assets' value increase automatically without doing anything, while the poor guys have no job, no cash, and nothing to buy anyway. That is precisely what happened on the great depression.

What we need is a MODERATE amount of inflation - not sure how much is the right amount, but high enough to avoid the deflation spiral, and low enough to avoid hyperinflation.

Plus, what's wrong with government spending? The government is supposed to represent the people, and hence, the spending should be something for the people. If you find government spending to be evil, then you should have a better, more sensible government, and stop blaming the spending itself.

Re:You can't eliminate them

[Calydor]

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. :-)