As a Canadian it baffles me that other countries are still messing with pennies. We stopped minting ours in 2012 and haven't looked back. I'm a proponent of cash, but the penny is obsolete. So too is any change smaller than a quarter, IMO.
Unfortunately, people like the penny in the US because it has Abe Lincoln on it. He was a Republican, and freed the slaves, so both political parties like him. That makes removing his coin somewhat difficult.
I grew up in Illinois ("Land of Lincoln") and it was one of the only states where you could pay toll with the penny, because Lincoln was such a powerful symbol. I guess that got killed off in 2017, however. (You can't use any coins now, it seems.)
(While researching this comment, I found it hilarious that IDOT had a COVID-19-related unpaid toll relief program, but they accidentally sent people $0.01 invoices because of how they "leveraged an existing system" to generate invoices. Another use for your penny!)
I mean, I don't get why there is one-person-per-coin anyway. They already have one-off runs for special commemorations so it's not like there's fear of confusion (or fear of counterfeit). Keep one side standard and put all kinds of people on them.
Though, one president might decide to out their own image on the coins.
It'll be weird in Canada when we replace the queen on our coinage...
Nothing is wrong with a 1 cent coin. It's just inflation has eroded it's value. The US penny for instance had the same purchasing power as a quarter today in 1913.
Also the japanese yen is an entire currency were each unit is a cent.
The problem is that eventually if your solution is to just throw out low value currency your just gonna have to throw out more because inflation.
The proper tool is to rebase your currency once you have accumulated enough inflation through numerous decades.
Also an interesting effect people don't consider about inflation is laws. For instance grand theft in the US is generally a 1000 dollars, but those laws don't account for inflation. Most these grand theft laws also were written in the 20's.
So stealing same thing today could be felony, but would have only been a misdemeanor when the law was written. So re-basing also helps ensures certain statues and laws remain just. You could argue that law makers should go through old laws or account for inflation to start with, but sadly that is not the reality. Tons of laws get written with fixed monetary units.
The rate was 1:100. It was done in 1958 but many prople were counting in the old currency until at latest the franc changed to euro.
Now we still have here and there monetary values given in francs (next to euros). I guess this must be a legal thing but come on, it is time to really move ahead and not keep backward compatibility forever here as well.
An interesting denomination was in Poland where the money was denominated by 1:10000
That's pretty much what you do. You print and mint new versions that worth 1:X of the old currency is. Also you quit printing and minting the old currency.
After long enough the old stuff is pretty much out of general circulation, but banks could still exchange for instance to the newer currency.
As an Australian, it also baffles me. We withdrew 1 and 2 cent coins from circulation in 1992, and prices are simply rounded to the nearest 5c when paying with cash. Maximum 3c difference per transaction, which averages out in the long run.
Yeah, NZ phased ours out late 80s/1990. 2004 we phased out the 5c piece as well.
Anecdotally (as in I might be wrong :) I remember hearing at the time the 5c piece was phased out it was worth less than when the 1/2c pieces were originally released. NB I have put zero effort into thinking if that makes sense or is true. (edit - confirmed)
[ Edit ] - We also made every other coin smaller. It's always startling to get an Australian 50c coin - even though it's the same size as ours used to be. Our's is now smaller than the AU 20c.
I'd say 99% of my transactions are apple pay now, with 1% being rare place that doesn't take paywave. I still have couple buck of cash for those super rare cash purchases on side of the road (damn they need alipay or something like that - NZ is kinda stuck with 'good enough' banking and failing to see innovation from Revolut and the like in Europe - that said surprised how much cash still used in Europe).
>and prices are simply rounded to the nearest 5c when paying with cash
In Canada as mentioned already in the comments we phased out the penny no more made after February 4, 2013.
But many business still today (Oct 2020) have items with prices ending in penny amounts. If you pay with cash it's rounded up or down but if you pay with debit, credit, or cheque the penny amount is used. Stupid because there's no incentive (ha pun!) for businesses to change (double pun!).
If Americans included sales taxes in prices, like virtually every where else, it wouldn't be a big deal, people would choose prices that were round numbers .... but instead every sales act (except petrol) requires math that most people can't do in their heads
As an American, I think pennies should only be used when appropriate.
Such as when traveling by air or making expensive purchases. There's nothing so satisfying as plunking down a sack of pennies when purchasing stuff and saying "just let me know if it's not enough."
The above is sarcasm. I hate pennies. They are pretty much useless these days. The only joy I get from them is when someone annoys me, I can throw them at the person.
They are so useless, in fact, that it actually costs nearly twice the value of a penny ($0.0183)[0] to mint one.
That said, I'd really like it if larger denomination coins ($1/5/10) were common in the US as they are in the EU. Generally coins with value more than $0.25 aren't used (yes, $0.50 and $1 coins exist, but are rarely used/distributed).
Of course it's easy to see why Pennies are still made in the US (at a loss, as you said), and it's the same reason so many things are the way they are (Healthcare, education, roads, etc.)
Someone is making a lot of money from the status quo, and they will fight very hard to keep it.
i'd much rather we (speaking as an american, but applicable more broadly) just rebased down 1 order of magnitude, so whatever a dollar buys today, you could instead buy with a dime. we could even let change appreciate immediately, which would be a nice little gift for the folks who tend to hold change (not rich people), but issue different paper money while exchanging the old bills out of circulation. concommitantly, we should rethink inflation as economy driver and impetus of the time value of money, which causes this devaluation in the first place.
> but issue different paper money while exchanging the old bills out of circulation
While they're at it they could bring the notes into the 20th century by making them distinguishable from a distance and less easily damaged. If you need to distinguish the old notes from the new ones to prevent anyone getting scammed, might as well kill two or three birds with the one stone.
I say eliminate pennies, nickels, and quarters. That way you can just drop the 100ths place all together and prices will be like: 1.5, 2.3, 9.9 instead of 1.25, 3.75, etc.
Americans do love to divide into powers of two (½, ¼, and ⅛) rather then tenths. If anything they would be more likely to issue an eighth dollar as they phase out the penny, the nickle and the dime. And you would see prizes such as 4 dollar and ⅜ cents (and they would probably write it as $4–¢⅜).
EDIT: And petrol stations would display the prices in sixteenths, but charge a sixteenth more.
The 1/8 dollar was a feature of the old Spanish dollar (hence the term "pieces of eight", the eight pieces being known as "bits" -- "two bits" is then a quarter), which is where the Americans got it in the first place. In fact, up to 2001 American stock exchanges expressed prices in 1/8 and 1/16 dollar increments (apparently 1/16 was only introduced at the NYSE in 1997).
Maybe we could redefine the quarter to be worth 20 cents? You could take 4 quarters to the bank, and get back 5 with "20" stamped on them. Machines that accept quarters just need to tweak the quantity. It'd be nice to have a smaller 50-cent coin also.
Why would it be best, considering the enormous cost of replacing 25 cent coins with 20 cent coins? What advantage does 20 cent coins have over 25 cent coins?
A number of EU countries (Netherlands, Ireland and Finland, IIRC) have already unilaterally done away with 1c and 2c coins. They're still legal tender, but all prices/sums are rounded to the nearest 5c so they're not necessary.
Psychologically dishonest perhaps, which is why it’s so widely used. We seem to give the first part of the number more weight. Same with birthdays. 28 to 29 isn’t a big deal, but 29 turning 30 is a big deal (or any multiple of ten).
Yes, it is so close to 7 that describing it as 6 is dishonest (we are not talking about 6.50 or 6.51). The brain is lazy and doesn't process it as 7 whereas the relevant part (7) is left out to deceive the customer into buying the product (marketing trick is probably straight out of book of Edward Bernays).
Instead, the product should be good on its own merit; so for me its an orange flag (or rather: proper, informative rounding is a green flag).
We see it elsewhere too. 199 instead of 200. 999 instead of 1000. Etc.
In poor Eurozone countries like Slovakia or Greece this notion was not received favorably when switching to euro, maybe it has improved since. Supposedly it would hurt the poorest if it's impossible to buy basic food items for unrounded price (in Slovakia the popular bagel-"rožok" has cost 4 eurocents in 2009, currently 7 cents).
Likewise, that it is not possible to get 5 euro notes, only 10s at least from most ATMs also caused complaints.
Not just silver, many coins changed from being made with high copper to way less a few decades ago when the price of copper rose. Was a stage and still is if you get an old 1p/2p(pre 1992 when they changed) coin that the value of the copper in them, exceeds their face value. Since 1992, they are copper coated steel, which is a common with many coins worldwide today of small denominations.
This is fun because steel was once a very valuable metal prior to 1850 it was a specialist material produced in low volume for purposes like weaponry. So when the penny was first minted it would have been insane to waste valuable steel on making coins, let alone the penny, but by 1992 steel was so cheap that it was the obvious choice for a cheaper core.
Currencies that are worth $1 more or less should round cash transactions to the nearest 10¢. Then we could simplify coinage considerably and we would all save time waiting in line for people to count out pennies and nickels over amounts that are immaterial.
I'm not clear how this isn't kicking the can down the road for awhile, when eventually nickels will be the new pennies? Is there not a better solution? How much do nickels cost to make?
I'm not sure what the problem is with this? Yes, eventually all coins will become obsolete due to inflation but we have decided that inflation is good and its hardly a problem to remove a coin every few decades
How is this a waste of time? Treasuries are constantly phasing out, destroying and minting new coinage. Deciding to not make new coins in a denomination and destroying the ones that come in is pretty much a single switch for them. And of course on the upside you save people tons of time not dealing with smaller coins.
The alternative here is to not have inflation and I don't see that happening (especially just to avoid phasing out denominations).
> The alternative here is to not have inflation and I don't see that happening (especially just to avoid phasing out denominations).
Clearly not true, nor am I advocating that.
It's a waste of time because there are stronger, more lasting measures that can be taken to solve this problem. This whole question reduces to the cost of minting coins.
How much time was really wasted. Its not like someone spent the last 10 years planning the removal of a coin. You could use this logic to say that literally any government function with a recurring basis is a problem.
Why haven't we solved roadworks, you fix the roads but then in 2 years it needs to be done all over again.
Plenty, since there are full articles being written about it.
And my friend, your second paragraph is irrelevant. This topic is about the removing coins from circulation, and my point is that they aren't going far enough if the goal is what they say it is.
My point is that it's wasting time and dumping problems on the future. There are stronger measures that can be taken, if the problem really needs to be solved.
"Fuck it, let someone else fix it." - I'm sick of this.
It's way better than nothing, and if a time comes to ditch the 5 cent coin that's relatively painless.
The real problem with the Euro coins is how badly they're designed. It's basically impossible to quickly tell the difference between 2 and 5, and 20 and 50. Very similar size, exact same color. If we're ditching 1 and 2, we should also make the 20 cent piece bronze or something.
How would that work if you have 4€ and you need a train ticket and a snack for your journey? Your ability to buy a chocolate bar and a ticket would depend on a dice roll, even though you have enough money?
I still lament the phasing out of the UK 1/2p coin, loved those as could use them to tighten up screws and adjust the brakes upon my bicycle of the time.
More evidence of fiat inflation. Most of the spare change I recieve gets lost or thrown away. Usually if I'm handed coins as change I tell the cashier to keep it because I know i'll never use it. Even homeless people scoff at me when I give them small change.
It's not like anyone is trying to hide evidence of inflation. Inflation is a measurable economic phenomenon, not some kind of secret. Furthermore, I think most economists would tell you that some level of inflation is good, because it encourages economic activity.
This is awful news. Inflation will always make people decide to phase-out the smaller denominations. One can argue that the smaller denominations are already useless, but then starting to phase out the smaller denominations will only make sure the population doesn't notice things getting worse over time.
There is just a serious answer to this: freedom to trade in whatever currency you'd prefer. Legal tender (when you're forced to use a given currency in a country) sucks.
For private transactions, you are already free to offer to trade in whatever currency you'd prefer. So is your counter-party, of course. If you both agree on a currency and an amount, you trade. If you don't agree, you don't.
Oh wait, you wished that you could trade in whatever currency you'd prefer without granting that same privilege to your trading partner?
If one of entities involved in the exchange doesn't want to trade, there is no trade. Simple as that. There is no such thing as privilege here.
I think you don't understand the concepts of legal tender and misunderstood what I said.
No, you cannot decide to trade in whatever currency you'd prefer. This is illegal in most parts of the world. Even if you base the exchange in another currency, you'll need to have a local legal tender to do it. There are exceptions, such as Panama... but in most of the world, you'll be required to exchange to the local currency.
There’s a distinction between freedom to trade and legal tender. You might misunderstand why I included the word private when talking about trade. In most countries, I can rent a hotel or buy a sandwich using whatever currency we both agree. For government (not private) transactions, I am typically forced to use legal tender. (See the first sentence in the link you shared.) For private transactions, I can often use a different currency provided my trading partner agrees.
In most cases where you feel like you are forced to transact in the local currency, you are being forced by your trading partner not by their government.
I somewhat regularly use USD currency in countries when that’s not the local legal tender. This is very common in the Caribbean and Central America. It’s commonly accepted (though less frequently done) in Europe. In some cases, shopkeepers have even arranged to offer me currency conversion services (often on their credit card machine) to facilitate their customers' preference to use a different currency.
In some rare cases, even a government demands to transact in a currency that is not the general legal tender. (The Dominican Republic charges tourists an exit fee that is denominated and paid specifically in USD.)
> There’s a distinction between freedom to trade and legal tender.
uh? Obviously? The enforcement of a legal tender implies in a blatant lack of freedom to trade in whatever currency the parties want. It's an >implication<, not an equality.
> For private transactions, I can often use a different currency provided my trading partner agrees.
> In most cases where you feel like you are forced to transact in the local currency, you are being forced by your trading partner not by their government.
No. At least in the United States, Canada, UK, Brazil, most if not all countries in Europe (and probably all countries where Euro is the currency), and Australia (that I know of), any transaction inside their own territories to be deemed legal has to be made with the national currency.
> I somewhat regularly use USD currency in countries when that’s not the local legal tender. This is very common in the Caribbean and Central America. It’s commonly accepted (though less frequently done) in Europe. In some cases, shopkeepers have even arranged to offer me currency conversion services (often on their credit card machine) to facilitate their customers' preference to use a different currency.
Paying with USD in countries with other currencies on you credit card? No wonder you think there are not restrictions on what currency you can use. You're basically letting yourself be scammed.
The fact that it appears that the merchant is accepting your money in USD (through DCC) doesn't mean they really are. It means that the conversion is done at their end. You might say they accept you paying in cash, then sure... In this case, they do. They might do so both legal or illegally. Now you're talking about tourism or things like small restaurants... things are more relaxed. Now try to do the same for large transactions between companies and, as I said, in most places – but not all – it'll be both illegal & enforced (and the banking system complies with these laws, so this is the first barrier to do so... unless you're talking about big companies that can have a holding overseas and so on).
