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Should America phase out use of the penny (cent)



 
 
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  #1  
Old October 19th 05, 05:35 PM
stonej
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Default Should America phase out use of the penny (cent)

http://www.mtulode.com/index.php?iss...=12&artid=4716

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  #2  
Old October 19th 05, 06:00 PM
jim menning
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Default Should America phase out use of the penny (cent)


"stonej" wrote in message
oups.com...

http://www.mtulode.com/index.php?iss...=12&artid=4716


I think their data may be off a bit. "Coinstar Inc., a company that
maintains coin-counting machines at banks and supermarkets, estimates
that Americans handle around $230 in pennies per year. While this may
vary a great deal from person to person, it still ends up a good chunk
of change."

Wow. The coin collectors must really be skewing that figure higher.
I can't imagine that Americans actually handle 63 cent coins per day!
That figure seems extremely high when considering the number of
"cashless" transactions that are becoming more common all the time.
Even if you would consider getting the maximum number of pennies in
change per transaction (4), Americans would have to average more than
15 cash transactions per day. The average 2.5 pennies change in a
transaction would mean Americans average more than 25 cash
transactions daily. I don't normally spend pennies, but I doubt that
I take in on average more than 15-20 in a full week.

Could they have missed the decimal point, and be really talking about
$2.30 in pennies per year?

Could that $230 figure really mean all change, not just pennies?

If the reported total is accurate, who are the people that are skewing
the figure so high?

jim menning


  #3  
Old October 19th 05, 06:19 PM
Cliff
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Default Should America phase out use of the penny (cent)

On Wed, 19 Oct 2005 17:00:56 GMT, "jim menning"
wrote:


"stonej" wrote in message
roups.com...

http://www.mtulode.com/index.php?iss...=12&artid=4716


I think their data may be off a bit. "Coinstar Inc., a company that
maintains coin-counting machines at banks and supermarkets, estimates
that Americans handle around $230 in pennies per year. While this may
vary a great deal from person to person, it still ends up a good chunk
of change."

Wow. The coin collectors must really be skewing that figure higher.
I can't imagine that Americans actually handle 63 cent coins per day!
That figure seems extremely high when considering the number of
"cashless" transactions that are becoming more common all the time.
Even if you would consider getting the maximum number of pennies in
change per transaction (4), Americans would have to average more than
15 cash transactions per day. The average 2.5 pennies change in a
transaction would mean Americans average more than 25 cash
transactions daily. I don't normally spend pennies, but I doubt that
I take in on average more than 15-20 in a full week.

Could they have missed the decimal point, and be really talking about
$2.30 in pennies per year?

Could that $230 figure really mean all change, not just pennies?

If the reported total is accurate, who are the people that are skewing
the figure so high?

jim menning

There have been several news stories over the last year of people
trying to cash in 1,000,000 cents. They also have posters of people
who deposit 8 to 10k in coins at a time. It doesn't take many really
large deposits of cents to skew the numbers one way or another.

I, myself, roll my cents and take them to bank and I usually cash in
every 3 to 4 months and normally drop off 30 or 40 dollars in cent
rolls (always makes my back hurt dragging in all those rolls).

I think cents are like coat hangers. You have one or two in your
pocket when you go to bed at night and when you wake up you find
another 3 or 4 in another pocket. They must multiply by themselves.

But, all kidding aside, my mother in law has quite a few jugs of cents
sitting around the house and she counts them before taping the top
shut. Last count she has close to $800 in cents. If she dumped them
at Coinstar that would tend to skew the numbers and I'm sure she's not
the only one sitting on a lot of the coins.
Cliff

  #4  
Old October 20th 05, 02:52 AM
jcsuperstar
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Default Should America phase out use of the penny (cent)

Here is one way to look at this. We dumped the half cent as
commercially useless in 1857. At 4% annual inflation, the cent would
reach the same level of uselessness in 17 years, before the nation's
centennial. Even at an unrealistic 1% inflation rate, it would be as
trivial in 69 years, in advance of the Great Depression. There is
absolutely no doubt that the day of the cent was many moons ago.

An interesting result is that, at 1% annual inflation over the 138
years from 1857 to the present, a cent then is equal to $4 today.
However, the data from 1913 to the present (92-93 yrs) reveals the
annual rate to average more like 3.2% -- a twenty-fold price increase
over the period. Even if we exclude preindustrial inflation, we have a
quarter today with the buying power of the old cent. Certainly the ten
cent piece is a safe bet as a lowest denomination.

That brings me to my propostion. We should mint 10c, 50c (smaller),
$1, $5, and $10 coins and print $10, $20, $50 (maybe), $100, $500, and
$1,000 notes. It would save us money is just plain more rational. We
should drop to a single decimal digit of precision instead of using
two. I know people love those two-bit quarters. Mint them as
collector coins annually. It will cost money initially to retro
registers, vending machines and countless programs, but will be worth
it. I think I have laid out all the justification for this and cannot
imagine a credible case dissenting from its general view.

  #5  
Old October 20th 05, 04:10 AM
Scott Stevenson
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Posts: n/a
Default Should America phase out use of the penny (cent)

On 19 Oct 2005 18:52:01 -0700, "jcsuperstar"
wrote:

Here is one way to look at this. We dumped the half cent as
commercially useless in 1857. At 4% annual inflation, the cent would
reach the same level of uselessness in 17 years, before the nation's
centennial. Even at an unrealistic 1% inflation rate, it would be as
trivial in 69 years, in advance of the Great Depression. There is
absolutely no doubt that the day of the cent was many moons ago.

An interesting result is that, at 1% annual inflation over the 138
years from 1857 to the present, a cent then is equal to $4 today.


Ummm, you might want to check your math...

However, the data from 1913 to the present (92-93 yrs) reveals the
annual rate to average more like 3.2% -- a twenty-fold price increase
over the period.


Even if we exclude preindustrial inflation, we have a
quarter today with the buying power of the old cent. Certainly the ten
cent piece is a safe bet as a lowest denomination.

That brings me to my propostion. We should mint 10c, 50c (smaller),
$1, $5, and $10 coins and print $10, $20, $50 (maybe), $100, $500, and
$1,000 notes. It would save us money is just plain more rational. We
should drop to a single decimal digit of precision instead of using
two. I know people love those two-bit quarters. Mint them as
collector coins annually. It will cost money initially to retro
registers, vending machines and countless programs, but will be worth
it. I think I have laid out all the justification for this and cannot
imagine a credible case dissenting from its general view.


Devaluing the currency by a factor of 10 would be cheaper, since all
the reprogramming would not need to be done, and we could continue to
use our existing coins. Under your system, you'd need to mint a
buttload more dimes and halves to pick up the slack of all the cents,
nickels, and quarters you're getting rid of.

take care,
Scott

  #6  
Old October 20th 05, 05:45 AM
Jerry Dennis
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Posts: n/a
Default Should America phase out use of the penny (cent)


jcsuperstar wrote, in part:
That brings me to my propostion. We should mint 10c, 50c (smaller),
$1, $5, and $10 coins and print $10, $20, $50 (maybe), $100, $500, and
$1,000 notes. It would save us money is just plain more rational. We
should drop to a single decimal digit of precision instead of using
two. I know people love those two-bit quarters. Mint them as
collector coins annually. It will cost money initially to retro
registers, vending machines and countless programs, but will be worth
it. I think I have laid out all the justification for this and cannot
imagine a credible case dissenting from its general view.


I must take exception to your proposition. Why would we want both a
$10 coin and a $10 note? We already have a $1 coin and $1 note and, as
you're well aware, the rags rule (ick). I would suggest minting 20
pieces and eliminate the $10 bill in favor of the $10 coin.

Jerry

  #7  
Old October 20th 05, 05:51 AM
jcsuperstar
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Default Should America phase out use of the penny (cent)

log(0.5)/log(0.96) = 16.98
log(0.5)/log(0.99) = 68.97
is correct

1 cent though at 1% inflation for 138 years is 4 cents, not 4 dollars.
(I knew that seemed obviously wrong.) But of course, 1% inflation is
unrealistic. 100 years at 3.2% has a cent being 23.33 cents. Close
enough to a quarter especially since I just pulled 100 years of
industrial economy and discarded the other 38 years of whatever.

Yes, we would need boatloads of dimes. Devaluing wouldn't work if you
mean doing something like the New Sheqel thing. I guess there isn't an
easy solution. But i do wonder if making all those dimes and small
halves (etc) would be balnced by cessation of the mintng of cents and
the printing of $1and $5 notes.

However, after a century and a half of standard inflation, a dollar is
equivalent to an old cent. So, given enough time, all fractional money
(aka coins under a buck) are trivialized and we just won't ne inclined
to use it much at all. It is obvious that pennies, nickels and (o a
lesser extent) dimes are already close to that. We have them in seat
cushions, lost in our car, dropped in the street and we don't care a
whole lot. The difference in price of a candy bar or a soda (hate to
use junk food as an example) that is a dime or less is not a huge
concern to most people most of the time. We are going to creep out of
our coins with inflation.

  #8  
Old October 20th 05, 08:51 AM
Edward McGrath
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Default Should America phase out use of the penny (cent)

GEEZ this subject has been beaten to bloody death so many fricken times
I'm sick of seeing it in RCC!. Guess what the fricken penny is not going
to be phased out because that would be logical and we all know from
living a long life that logic doesn't exist in this world!!! Damn these
dark german beers are really good!!!

  #9  
Old October 20th 05, 03:57 PM
John Charles Wilson
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Posts: n/a
Default Should America phase out use of the penny (cent)


jcsuperstar wrote:
Here is one way to look at this. We dumped the half cent as
commercially useless in 1857. At 4% annual inflation, the cent would
reach the same level of uselessness in 17 years, before the nation's
centennial. Even at an unrealistic 1% inflation rate, it would be as
trivial in 69 years, in advance of the Great Depression. There is
absolutely no doubt that the day of the cent was many moons ago.


The inflation calculator at http://www.westegg.com/inflation
says $.01 in 1857 is equal to $.21 in 2005.


An interesting result is that, at 1% annual inflation over the 138
years from 1857 to the present, a cent then is equal to $4 today.
However, the data from 1913 to the present (92-93 yrs) reveals the
annual rate to average more like 3.2% -- a twenty-fold price increase
over the period. Even if we exclude preindustrial inflation, we have a
quarter today with the buying power of the old cent. Certainly the ten
cent piece is a safe bet as a lowest denomination.


Even thoguh the figures before 1913 are unofficial, there are
inflation statistics going back to 1800. Interestingly enough, 1913 is
also the year the Federal Reserve System started and inflationary
trends became a permanent feature of our economy about then. Before
1913 there were temporary inflations due to wars and disasters that
deflated soon after. (No, I'm not one of those paranoid right-wing
anti-banking freaks, but the inflation data does seem to justify this
part of their beliefs.)


That brings me to my propostion. We should mint 10c, 50c (smaller),
$1, $5, and $10 coins and print $10, $20, $50 (maybe), $100, $500, and
$1,000 notes. It would save us money is just plain more rational. We
should drop to a single decimal digit of precision instead of using
two. I know people love those two-bit quarters. Mint them as
collector coins annually. It will cost money initially to retro
registers, vending machines and countless programs, but will be worth
it. I think I have laid out all the justification for this and cannot
imagine a credible case dissenting from its general view.


While I agree the cent is outdated, most people still consider the
nickel to be useful. At least vending machines take it. My
counter-proposal is to eliminate the cent and add a $500 bill now. When
price levels reach double what they are now (my estimate is 2023),
eliminate the nickel and quarter, keep the dime, issue a 20 cent piece
(the same dimensions as the one from the 19th Century but in clad),
change the 50 cent piece to a coin similar in materials to the golden
dollar but half the weight and half the size on a cubed basis. Then add
a $1,000 bill.

Personally what I think *will* happen, as opposed to what I think
*should*: The cent will go through a transformation or two, to aluminum
and then steel. Once there is no metal they can be minted in at a cost
of less than one cent, the cent will be abolished. The current zinc
cent costs 0.8 cents to make and a steel cent would cost 0.5 cents at
today's prices (the metal would cost almost zero but the striking
process would be more expensive). Some of us may well live to see a
cent-free economy....

  #10  
Old October 20th 05, 04:01 PM
John Charles Wilson
external usenet poster
 
Posts: n/a
Default Should America phase out use of the penny (cent)


Scott Stevenson wrote:
On 19 Oct 2005 18:52:01 -0700, "jcsuperstar"
wrote:

Here is one way to look at this. We dumped the half cent as
commercially useless in 1857. At 4% annual inflation, the cent would
reach the same level of uselessness in 17 years, before the nation's
centennial. Even at an unrealistic 1% inflation rate, it would be as
trivial in 69 years, in advance of the Great Depression. There is
absolutely no doubt that the day of the cent was many moons ago.

An interesting result is that, at 1% annual inflation over the 138
years from 1857 to the present, a cent then is equal to $4 today.


Ummm, you might want to check your math...

However, the data from 1913 to the present (92-93 yrs) reveals the
annual rate to average more like 3.2% -- a twenty-fold price increase
over the period.


Even if we exclude preindustrial inflation, we have a
quarter today with the buying power of the old cent. Certainly the ten
cent piece is a safe bet as a lowest denomination.

That brings me to my propostion. We should mint 10c, 50c (smaller),
$1, $5, and $10 coins and print $10, $20, $50 (maybe), $100, $500, and
$1,000 notes. It would save us money is just plain more rational. We
should drop to a single decimal digit of precision instead of using
two. I know people love those two-bit quarters. Mint them as
collector coins annually. It will cost money initially to retro
registers, vending machines and countless programs, but will be worth
it. I think I have laid out all the justification for this and cannot
imagine a credible case dissenting from its general view.


Devaluing the currency by a factor of 10 would be cheaper, since all
the reprogramming would not need to be done, and we could continue to
use our existing coins. Under your system, you'd need to mint a
buttload more dimes and halves to pick up the slack of all the cents,
nickels, and quarters you're getting rid of.


Actually when you raise the value of a currency unit that's
"revaluing". "Devaluing" would be the exact opposite. More importantly,
using the same coins after your revaluation multiplies their value 10
times. There would be a severe run on coins as people hoard them to get
rich quick.


take care,
Scott


 




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