Centerfield

The problem with this idea is that they'll alway round UP. Companies will never allow themselves to lose money that way.

Well, they'd round whichever way congress the people told them to.

Rounding need not result in anyone being charged more or less money when all purchases are combined. THe results should be random, and should even out. If necessary, it could even be mandated that the rounding choice be randomly determined.

The fact that these coins have more worth as metal than as currency should be a HUGE CLUE.

A huge clue that they're REAL MONEY, and not fiat money! You're arguing against keeping money that's inherently worth at least face value?

lately, this is really becoming a bigger problem as the price of copper has gone up. I have heard stories of people trying to steal copper lately from anywhere they can get it including downed power lines in some cases.
just a quick search on "stealing copper" shows the top result as this
article

Although the CNN article doesn't report it, the NY times states that the value of the copper-nickel metal blend in a nickel is worth 7 cents. For pennies made before 1982 (which is a large fraction of the circulation), that were made with 95% copper, the value of the metal in each penny is 2.13 cents. With the new blend of pennies that are made now, the mint must spend 1.73 cents per penny to replace them.

Given this data, I don't really have much of a problem with the law as written. However, I think a better solution is to find a better and cheaper material out of which to manufacture pennies and nickels.

You can't get rid of the penny unless you get rid of the penny. It would be a major pain for retailers to account for electronic pennies and non-electronic pennies. Plus, what effect would that have on sales taxes.

I am positive that the penny has a powerful lobby in state and local governments, retailers and tourism. Tourism? Do you know how much money that big amusements parks make off of penny smashers? They have tried Nickels are not as easy. Dimes are too small. Quarters cost too much. Trust me, Walt Disney Company will be all over fighting getting rid of pennies!

A huge clue that they're REAL MONEY, and not fiat money! You're arguing against keeping money that's inherently worth at least face value?

I'm not sure either what your point is or what you are asking me. Or are you just being opaque?

I'm not arguing that people should throw away their change. I'm arguing that it is an unnecessary nuisance to use physical nickels and pennies.

If we decided to, we could start making coins in thousandths of dollars and ten thousandths of dollars (in addition to the halves, quarters, tenths, twentieths, and hundredths we now use.) And then we could price items all the way down to the ten thousandths of dollars. The coins would be real money. But would it be a worthwhile venture for us to pursue?

It would be a major pain for retailers to account for electronic pennies and non-electronic pennies.

Actually, I recall reading somewhere that one country has already made a similar change (extra decimal places for electonic transactions only), and it hasn't bemm a problem. I forget where, but I want to say the UK.

Plus, what effect would that have on sales taxes.

The same effect. Virtually none. For example, with sales taxes, you'd only round after tax was applied. And while we're here, notice that taxes are a good example of an instance where rounding happens all the time and no one ever bitches or even notices. Ever been somewhere where the sales tax, is, oh, let's say SEVEN percent? That means that rounding is going to be what happens for MOST calculations. Zero controversy. And counting. :-)

I'm thinking this is economically complex. Moreso than I am able to grasp. I agree there is a huge clue there, but lean more towards making a cheaper penny.

This may not even be an intelligent thing to say, but we are on the base 10 monetary system. A penny is one unit. If you make the dime one unit aren't you creating a pretty big dislocation?

I don't think so Dennis. I think you could argue that most people think the base unit is the dollar. Coins are all fractions of our basic unit, the dollar.

This change would just recognize inflation and save us the trouble of having tangible transaction units less than 1/10 of a dollar. Pretty simple.

it would be even simpler if we businesses could be allowed to opt out of using pennies. Not sure whether they can, legally. We'll die under the weight of our accumulated pennies waiting for the government to do the obvious.

My point, which should be obvious, is that there are currently two units of American money in circulation that have inherent value (as versus simply statutory value) and constitute "money" in the classical sense. And those are the two units you want to take out of circulation.

What have you got against real money? :-)

So the penny goes the way of the mil. (Look it up.) Just another result of on-going inflation . . . not to mention the 10x inflation in the 1970s. We'll survive.

Coinstar. There is another company who will fight it. I think they make most of their money off of stored pennies. It will be funny if you do eliminate it. The mass cashing in of pennies and pulling them off the market to be reused will drive the market cost. Probably end up costing more money to collect and melt down the pennies than they would get.

Sure, you can get rid of the penny. I am just not sure that the total cost is worth it. Maybe the government needs to have a drive to collect old pennies so they can recirculate.

Thanks for clarifying that. It was far from obvious to me. I didn't envision simply declaring them to be valueless, and I'm not sure why you thought I did. People can choose to cash in their pennies, or keep 'em.

Maybe it's not even necessary to take them all out of circulation under any sort opf phased plan. If the government simply stops making them, and businesses can move to rounding that will get rid of 99% of the nuisance.

Jim, Coinstar can kiss my pasty white arse with their machines taking 8% for cashing in pennies. They are parasites piggybacking on the problem. Busniesses can refuse to acccept more than a certain amount of pennies, and many banks have policies against accepting more than say $20 at once. The market is telling us in many ways that pennies have descended to nuisance level. We ought to listen.

What have you got against real money? :-)

LOL. Ok, Mr. never-buy-a-new car, make-my-own-computers, not-relying-on-social-security, never-pass-a-penny-without-picking -it-up, let's call this what it is. The reason you don't want pennies to be phased out is because then you'd have to find something else to pinch. :-) And don't tell me that's steer manure, you know it's so.

Unless there were a groundswell of popular initiative on this issue, the most likely result is one the business community colluded to arrive at. Which is: not ever rounding down.

I'm not saying there wouldn't be some kind of popular backlash to temper such a change. Only that such a public outcry would be necessary and even then it would probably only squelch the entire idea altogether.

LOL. Ok, Mr. never-buy-a-new car, make-my-own-computers, not-relying-on-social-security, never-pass-a-penny-without-picking -it-up, let's call this what it is. The reason you don't want pennies to be phased out is because then you'd have to find something else to pinch. :-) And don't tell me that's steer manure, you know it's so.

I deny it. I principally pinch the missus (who pinches back). What are you, prejudiced against the conscientiously parsimonious? Your proposal would hurt the poor, by taking away a slightly-more-than-minimum-wage endeavor (picking up pennies). What have you got against the poor? Or is it a distaste for the utterings of Benjamin Franklin?

Seriously, the proper solution for the government if they wish to keep the penny and nickel supply up is to use cheaper materials in future manufacture. It's the changeover cost that annoys them--they know if they use cheaper materials in new issue, that instead of being incremental, Gresham's Law will hit with a vengeance and folks will REALLY hoard their old coins, further exacerbating the problem. They know this because experience has taught them so, with the gold changeover of the depression, the silver changeover of the '60s, and again with the debasement of the copper penny to alloy pennies.

But I still like having a couple of forms of "real" money out there with intrinsic value, small as they are.

All I have to do is just accept pennies and nickels and I will have real value? Cool it’s better than going out and buying gold bars.

DonPato
San Jose