Would this compromise work for the "Eliminate the Penny" Debate?

Breakage is set by State Law and benefits neither the consumer or merchant because the State claims it.

 

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Funny how people think that rounding is only up. No, it's up or down to the nearest cent now, and that wouldn't change if we get rid of the cent.

 

The 2.05 would not become 2.10 because the nickels that are already in circulation would not be removed. They would still be used. It takes MANY years for nickels to wear out.
And you could pay $1, three quarters and 3 dimes= $2.05. Why round up?

 

Conversely, if the item sold for $1.97 you'd "save" 2 cents.

But only if your particular State doesn't collect Sales tax.

Additionally, it's a rounding up or down on the TOTAL Purchase price of evey thing you've purchased, not individual items so the very MOST that anybody would tand to lose or gain, would be 2 cents.

As it sits right now, "IF" your State/County/City charges a sales tax rate of .xx%, it gets rounded UP to the nearest cent.

So, in reality, it's neither here nor there. You win, you lose depending upon how badly folks want to whine about it.

 

If this was within his constitutional power to do so, it might be worth discussing, but it's not. The power to coin money lies with Congress, specifically, the House of Representavtives.

 

Fewer than you think. Sales are reported quarterly, in summary by outlet in most (not sure of all) states.

 

I'm a big fan of moving the decimal point. A can drink that cost a dollar now cost a dime. The average house price becomes $25,000.00 but you're now making 10% of what you use to. A penny would have a purchasing power of a dime and a nickle would have the purchasing power of a half dollar.

This solves the disparity between the cost of metal in a one and five cent piece and the purchasing power of the coin since the coin would hold 10 times it's current purchasing power. This would also mean that mintage would only need to be 10% of the current level and the same goes with paper money. The long term saving would out weigh the initial boom of the increased value of circulating currency.

Of course this would take a financial disaster and act of congress before anyone would go there mainly because most people won't get it.

 

Devaluing our currency by 10% would cause enough inflation to create it's own financial disaster all by itself

 

Or we could just not appease corporate-welfare interests (zinc lobby) that, with the rapid changes in the world (technology), are going keep the USA from being competitive.

I don't think I have to tell you that this is only going to get worse now.

Tell me, what is the difference between interests like the "zinc lobby" and the Chinese "State-owned industries?" As to the actual effect they have, not much.

Just to list a simple example of the backwardness of bending to such interests: The "holiday" and "vacation" lobby keeps my state from shortening the three-month summer vacation for schools and shifting that time off somewhere else in the school year. Three months in a row off from school is the worst thing for students: Many students spend the first three months of every school year re-learning everything that they lost over the summer. Other countries don't have to deal with this wasted time re-learning. Australia has a rotating schedule of six weeks of school, two weeks off. Many east Asian countries have only a month-and-a-half of summer break, and a longer winter break. And all of them have MORE time off in their school year than U.S. schools(!), yet perform better than U.S. schools in some measures.

 

if you got rid of the cent, how would you pay for a Gallon of gas?

Marketing for about everything relies on the .99 and .95+ aspect to get people to buy something that they wouldn't otherwise.

Marketing-wise people won't buy something at $10.00, but will at $9.99 ... called psychological pricing models.

Maybe if we replace the Cent with a new denomination, such as call a new one the Penny ? lol

 

Considering the insane waste our government finds totally acceptable, the debate over the cost of the cent should be so far down the list of importance as to render it near meaningless.

 

Restaraunts with whole dollar menus are the future IMHO. Same goes for many things.

 

Well, the gov'mint can't just say that on particular day in the future, the present currency and coinage will be worth 10X what it is now. That would lead to massive hoarding of both as the day approached plus plenty conflict between the few who didn't get the message and others who did when the day arrived. What governments can and have done is issue currency and coinage in a new denomination that is worth some power of ten more than the old stuff. If done honestly, the ratio is set and remains in force for years perhaps forever. The old stuff gradually disappears through attrition or withdrawal as it passes through the banking system. The gov'mint may set a future date after which the old stuff is worthless. This would be done more to simplify money handling than to gain some windfall for gov'mint.

Turkey did this about 12 years ago. They issued "new lira" (Yeni Lira in Turkish) that were worth one million of the original lira. I spent some time in Turkey about a year after the transition started. My impression is that it went relatively smoothly. Folks were glad not to have to deal anymore with all those zeroes in commerce. With a million-fold difference, even in bookkeeping where the denomination wasn't stated explicitly, it was pretty clear which denomination was being used.

I think it will take more than one decimal place of inflation though before the U.S. issues a new higher value denomination. Chances are we'll simply follow Canada and Australia and drop the penny and perhaps the nickel. There won't be any choice once the penny contains more than one cent worth of zinc.

Cal

 

Gas in the U.S. is usually priced to the nearest 1/10 cent. No one seems to mind that rounding occurs to pay the tab. I was recently in Australia. Items can be priced to the nearest cent even though there is no such coin. If paying in cash, it's rounded to the nearest multiple of five. No big deal. If paying with check or plastic, the cent is still used.

Cal

 

Nice psychological pricing. Paying more for it than the advertised price.
It adds up over time. just ask banks about the 0.001 cents over time ...

 

First, rounding can go up or down. It's actually the total tab that is rounded, not the individual items. So creative pricing will be to the merchant's advantage only if one item is bought. So, if an item is priced at 1.03 and one is bought, yup, the merchant gains 0.02 if rounded to 1.05. But if two are bought, the total is rounded to 2.05 and the merchant loses. In addition, rounding occurs only if paying in cash. Any other form (credit, debit, check), there is no rounding. Throw-in that merchants still have to compete with each other on price, and the idea that rounding is going to rip-off consumers is just a boogieman. It's not happening in Australia or Canada.

Cal

 

Did Canada really give up on the cent or are they using ours as we continue to use theirs?

 

They stopped making them. I don't know if that's considered giving up, you decide.

 

As far as government spending waste / inefficiencies, we have to start somewhere and make it work. Ridding the penny from US coinage is relatively a small start, but it's a start that would be recognized by ALL since the penny is so prolific.

And, countries that don't use the 1 cent denomination anymore are doing just fine at the pumps. I've read that if you use a credit /debit card or check, you get charged the EXACT amount. If paying by cash, it rounds up or down to the nearest 5 cent interval.

Here's what Canada does:

 

Not quite as many in my collection, but neither the US Mint nor the Royal Canadian Mint can have my hoard back!