Well the way I see it, the last thing the U.S. Government needs to do is drop the cent and nickel, at least for now. With the economy as it is, the last thing we need to do is advertise to the world is how worthless the cent and nickel have become. I also see the nickel and the cent as a type of American Icon. It is one of the few things that has been around longer than I have.
That was interesting. Looks like the penny will survive for at least this year, and very possibly next year. Question has any other form of currency gone 100 years with the obverse for the most part remaining intact? Regards, S
Sure, the Swiss Franc/Franken for example. The 10 centimes/rappen coin has been exactly the same, on both sides, for the past ~130 years. Pretty much the same applies to the 20 c/r coin (except for the change from Ni to CuNi) and the 1/2, 1 and 2 Fr coins (except for the change from Ag to CuNi). Oops, sorry - the Fr coins now have 23 stars along the edge instead of 22. Christian
I like the new 1 cent coins face lift ideas that was shown,, I say the penny has 5 more years no problem.
The Austrian Maria Therese Thaler has been minted unchanged (including the date) for more than 225 years, and it was legal tender for almost 180 of those years!.
Stop me if I'm wrong about this, but the mint (and the BEP and treasurey dept) make money (not literally) during the course of business. I mean they operate at a profit right? It costs $.02 to make a cent, but something like $.06 to make a pres dollar. Sure they loose money on the cent, but they more than make up for it with the dollar (and quarter). Heck doesn't it cost like $.25 to make a $100 bill? I don't think they are going to go out of business any time soon. Plus if they did away with the cent, not only would prices go up slightly, but think of the expense that would be involved. All of the software that would have to be updated for cash registers and such, plus changes in sales tax, income tax, etc... There is a lot more to it than simply saying "lets get rid of the penny"
I could be wrong but I am pretty sure they said (in the 60 minutes segment) that all paper bills cost about .06 to make.
Well like any good business, you cut your losses! If they are making a loss on the 1 cent coin, what is the point of making it and try to recoup your loss in other ways?... besides it really has no actual value anyways for anyone except a cent collector... people just dump pennies into the nearest charity box (charities may suffer to some extent yes!), ask the cashier to keep it or simply throw them on the ground. It simply seems to be a waste of copper/zinc now. Some updates would be needed, but countries phase out coins all the time... the united states had a half cent too once upon a time remember?
I suppose they could do that, but if it were me, I'd nix the quarter as you mentioned, and bring variants of the $2.50, $5, and $10 coins back.
STOP! Modern life doesn't have much need for those little coins any more. Inflation has made them a nuisance for most folks. It would be better to just demonetize them all and end the bleeding at the mint. It wouldn't be that bad to change over- couldn't be worse than Y2K!
I said it before and I'll say it again, to make a decimal monetary system like ours work, you need the cent as the smallest denomination - if for no other reason to make change. A postage stamp is .41 - sales tax (in Buffalo, NY) is 8.5% rounding up to the nearest .05 is gonna cost ya. Electronic transactions have not slowed cent production in recent years. The mint will have to make copper coated steel cents like Canada or make them smaller or both.
. . . and going to 42 cents (or so it was announced yesterday). What will a stamp cost you if the cent is eliminated? 42 cents? Nope. 45 cents. (Everyone will round up, especially the Post Office.) That is an increase of 7.1% thanks to rounding up (9.8% if the stamp price is 41 cents). And if the nickel is also eliminated it will cost you 50 cents. That is an increase of 19% (22% if the stamp price is 41 cents). Sales tax will be similarly increased. Let's say you buy a candy bar for $0.75 and sales tax is 8%. Sales tax on the candy bar is 6 cents but it will be rounded up to 10 cents for a total of $0.85. That makes the effective sales tax on that item 13.33% - an increase in sales tax of 66.7%. Who can least afford to pay 10%, 20% or 22% more than the actual price of a product? The poor. They are the ones that will suffer the most if cents and nickels are eliminated.
Hmm. In Germany, a standard letter used to be 1.10 DM before the euro cash changeover, and that amount got correctly converted to 56 cent in 2002. But such "odd" prices were not popular, and after some time the postage for such letters was changed and has been 55 cent since then. Sure, prices of various other postal products went up. But that is my point - some prices will be lower and some will be higher ... Over here - in Finland and the Netherlands for example - this is done differently. That candy bar is, say, €0.75 plus 8% VAT, thus a total of 0.81 - and if that bar is the only item you buy, the total you pay will be 0.80. Now if you buy several items and the cash total is 4.58, then you pay 4.60 ... Does not sound very complicated to me, nor does it discriminate against poor people. Christian
Dunno. This thread is wandering. I don't think the penny (cent - for the perfectionists) is going away anytime soon - I think the point is that it will be in some other kind of metal or whatever that is cheaper to make.
It's called concentrated interest vs. diffuse opposition, and it's why I wouldn't hold your breath waiting for the penny to be phased out. People who have an interest in the penny continuing to be minted have much more concentrated interest and political power, and are just plain more dedicated and involved, than those who want to see it dsicontinued, even though they might be in the majority. To put it in simpler terms, the people who want the penny continued care more than those who want it ended. They also have much more vested interest in it continuing. It's just the nature of American politics. Congress has to be the one to get rid of the penny if anyone will, and no Congressman will do something that will cost him votes if he can avoid it. Getting rid of the penny will get more dedicated unifued oppostion than no getting rid of it, thus costing any given congressman more votes than if he just lets the penny continue. No matter how logical it is to get rid of the penny, it's just not going to happen unless you can get A LOT of people tocare about it and form unified opposition. And face it, that's never going to happen.
I find it interesting how different the attitude towards our low value coins (1 and 2 cent) is in Germany and the Netherlands. Here in DE it's much like in the US a s far as I can tell, while in NL a more pragmatic attitude prevails. As for what could be done in the US (as in very theoretically doable ) is something like the Dutch regulation: The government merely made a law that allowed businesses to apply the rounding of cash totals. Stores that prefer to round can round (but need to indicate that, e.g. by a sticker at the entrance or cash register), but no store is forced to do that. This way the number of low value coins that is needed in circulation has dropped significantly. But the pieces (even the Dutch ones) are still produced, and of course remain legal tender. Christian
