Penniless Literally!

The penny is the best collectible there is! They could make it out of a cheaper material,
say aluminium with a copper clad. (I have a nice collection of shiny Japanese 1-yen coins
made from Al.)

If they do decide to discontinue it, I hope they will continue to
make collectible versions of it from 100% Cu.

I enjoy finding "lucky" pennies and have found some MS-quality business strikes staring at me lovingly
from terra firma!

Yesterday while taking a walk I found a 1995 (not doubled), and later handed it to a little
kid who slipped in the snow and was in pain. You should have seen the bright smile on that kids
face ... Abe Lincoln forever!

 

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Is that bright smile worth $40 million dollars of metal costs per year, plus hundreds of millions of dollars in distribution and handling costs?

Think how much brighter his smile would have been had you handed him a shiny new nickel .

 

flaminio - go back and read my last post, and your exact question that I was responding to. That exchange had absolutely nothing to do with the economic effects, or wisdom, of nickel rounding vs. cent rounding, but only with the manner in which the presence of sales tax affects rounding.

BTW your spreadsheet analysis can make just as good an argument for rounding to the nearest dollar as to the nearest nickel. That is already done on your income tax forms. A couple of years ago I had an unusually large number of transactions to report, and just for kicks I refigured my 1040 with exact dollars and cents. On that basis my taxes would have been increased by 1¢ - on a tax bill that was higher than my total earnings in my best year before I turned 50!

In fact, if enough transactions are considered, rounding to the nearest $100 would also eventually come out the same way.

 

Right. And my point was that the presence of sales tax has no effect whatsoever on cent rounding versus nickel rounding.

Do you have a contrary example?

Very true. We are in agreement then that the total needs to be rounded somewhere. The question then is: where is it economically most productive to round? Clearly, rounding to the nearest $100 is too high, and rounding to the nearest mill is too low. The answer's somewhere in between.

Personally, I feel that rounding to the nearest dime is most appropriate. When the half cent was killed in 1857, it had the purchasing power of about one dime today. (According to the Inflation Calculator, putting in .005 for the amount, 1857 for the initial year, and 2005 for the final year.) So, if a half cent was deemed economically unnecessary back in 1857, then correspondingly anything under a dime would be economically unnecessary today.

The only reason I use nickel rounding in my examples is because that's what is called for in the bill submitted to Congress by Jim Kolbe. In reality, nickels have also become economically unviable, as the cost of copper and nickel metals has risen to the point where it costs 7.2c to make one nickel -- clearly a losing proposition. Dimes are still profitable, however. Changing the nickel composition to something like nickel plated steel would remedy that problem, however. Pennies, however, are pretty much hopeless no matter what metal you choose. There's much more lost in the distribution and handling of them than the cost of the metal alone.

 

Rounding to the dime is fine except we wouldn't be able to make change for a quarter. Rounding to the dime will waste the production cost of 40,000,000,000 quarters which is not insubstantial.

 

Well, there are ways around that, but going to dime-rounding would be too big of a leap for most people anyway.

Nonetheless, whether we adopt nickel-rounding or not, the composition of the nickel will need to change. We can't go on losing over two cents on every nickel minted.

 

Hello folks:

Perhaps if things were rounded up to the nearest dime, that might increase the need for dimes.

I think when Norway rounded up to the nearest 10 ore, they eliminated the 25 ore coin, and their lower coins were then the 10 ore and 50 ore coins.

I can't see the quarter going away, so I figured stores would have need for more dimes.

Anyways just a thought.

 

First, all proposals have called for rounding to the nearest next denomination, not always "up". Maybe it was different in Norway.

Yes, if we were going to go to dime rounding, the quarter would need to cease production (note: not demonitized -- no need to recall them), but we would need a new 50c coin -- the current half is too big. Something about midway between the size of the nickel and quarter, and perhaps multi-sided to make it distinct would work well, I think. That said, there have been no official proposals made anywhere suggesting this.