What Would Occur If The United States Only Minted Cents Every 3 Years?

If you think back to the more drastic situations of the depression era, tokens weren't as common as printed script, and that is probably what would occur if such a thing would happen.

 

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I think merchants would just round the total down, many do so now.

 

We are talking cents. I think some of the earlier suggestions of hoarded cents coming out and/or retailers rounding up would occur, thus probably making the cent more obsolete than it already is.

 

People are being a little overdramatic about this aren't they? Reminds me off all the tax tokens they made for fractions of cents until people realized that if you rounded to the nearest cent, you'd never be out more than 1/2 a cent at worst. Worst you'd be off for rounding to the nearest nickel is five cents. And that only applies to CASH transactions; computers can handle cents just fine, whether pennies existed or not. Or they'd just round to the nearest nickel if they were programmed to. Plenty of countries have gotten rid of their low value coins and it didn't cause inflation, catastrophe, zombie apocalypse, etc. New Zealand doesn't make a coin smaller than 10 cents and they seem to be doing OK last I checked. (P.S. Canada is dumping their cent next year. Let's see if they collapse or not. I'm betting not.)

Let's say you were paid every two weeks and were ripped off just short of 5 cents every paycheck. That's $1.30 a year at worst. You really think that's going to have a significant impact on your purchasing power?

 

Honest Abe has just been outsourced!!!!

 

Honest Abe has just been outsourced!!!

 

I got tired of getting new rolls when I want to roll search. I would like if they cut down production, they are making a lot this year. The last penny search I did though were customer wrapped roll. A bank manager called and she told me she had a bunch.

 

Intra-bank commerce

As others have said, if you're going to mint a circulating coin once per three years, shutdown the mint.

As for the impact of losing the penny, this is essentially what can "fix" the rounding issue:

Stores will go to a "receipt" credit system, so your "change" would be stored on your receipt, which would act as a script. Since people would tend to lose these, eventually, each store would have a cash surplus on their books. Since receipts could potentially be forged, a more viable alternative would be akin to what Bank of America does currently: Imposed savings.

You would be asked to sign up for a discount club with the retailer. Whenever your change didn't work out to a nickel, your account would be credited the difference. You would then have this "credit" applied to your next purchase, and the cycle would continue until you finally accrued a net positive of a nickel, at which point, your account would mod 5 to zero.

The cost savings to the mint would possibly save up to 50% of the US Mint's annual budget. That cost savings to the US government would be further increased by the net loss of M2/M3 in the money supply. The net result would actually be DEFLATION in the short run, as there'd be less money supply. Eventually, people would be normalized to the idea of 5-cent pricing, and the stores/government would get rid of math which yields non mod-20 money structure.

I'm pretty sure we've had several interpolations of this debate. The two most common versions are the penny and the dollar/2-dollar coin.

I still say the Mint would be best served to go with:

5-cent, 20-cent, $1 coins. $5, $20, $100, $500 bills.

I forgot the intra-bank comment...

Everyone focuses on inter-company and inter-bank commerce, but as we shift toward a cash-free society, the penny will affect intra-bank accounting. This is akin to the Thai satang. Even though no one uses satang, they are an official currency unit. Banks use them in inter-bank commerce and essentially settle them in intra-bank accounting. As a result, the Royal Thai Mint still made 1 satang coins as recently as 2009. The coin contains 0.5g of aluminum. At that time, aluminum cost around 0.19c per gram. A satang is approximately equal to 1/30 of 1c. So, the Royal Thai Mint (in materials alone) was purchasing $10 of aluminum to produce $1.65 or so in coins annually for inter-bank accounting.

 

My coin dispenser in my truck only has three spots for quarters, nickels, and dimes. I guess that the japanese were ahead on the concept of ceasing cents 11 years ago.

 

Absolute pandemonium! Rioting in the streets! Mobs of hooligans would be raping your churches and burning your women! Is that what you want?

(Yes, I meant to say raping your churches, Google is your friend.)

 

All interesting answers.

 

This was meant as a joke, right? If not, the dispenser released coins that would be accepted in parking meters, vending machines, and payphones.