Posted on 02/08/2010 9:00:06 AM PST by qam1
Will the increased cost of base metals finally bring about a change to the composition of coins? President Obama's recently submitted 2011 Budget includes a proposal to allow the United States Mint greater flexibility in the material composition of coins for the purpose of reducing production costs.
Since 2006, it has cost the US Mint more than face value to produce and distribute the penny and nickel. This has led many to debate the merits of eliminating the lower denominations or at least altering the compositions.
In 2008 a bill was introduced known as the Coin Modernization and Taxpayer Savings Act of 2008. This bill had proposed changing the composition of the cent to steel, although it would be treated to impart a copper color. The bill would have also provided the Secretary of the Treasury with authority to change the metallic content of the five cent coin. This bill was passed in the House, but never voted on in the Senate.
The 2011 Budget revives the issue and expands the scope to include the dime, quarter, and half dollar, in addition to the penny and nickel. The Department of the Treasury would have authorization to approve alternative weights and compositions for any of these five denominations.
Based on information in the United State Mint's 2009 Annual Report, the cost of the penny for the most recent fiscal year was 1.62 cents and the cost of the nickel was 5.79 cents. The annual loss for these two denominations was $22 million. The cost of producing the other denominations remained below their respective face values....
(Excerpt) Read more at news.coinupdate.com ...
Here’s a thought - let’s coin money with precious metals and make our money worth something!
Put Obama’s face on all the money now?
*gasp*! Wood and plastic are bad for the environment!!!
They are not factoring in the durability of the coins.
If a coin is worth more than the face value is than not like the old “gold standard”? will people demand payment in nickels?
“Let me be clear, make no mistake about it—I do not
degrade and debase everything I touch. Just money.*”
Bam-bam Soetero
How dare you suggest we actually do what the Constitution says, you should be ashamed of yourself, The Very Idea that we stop letting the Fed and its member banks earn interest on all money in circulation is blasphemous. Not to mention allowing the Government to have an unlimited amount of Money to spend at our expense, instead of actually having to Tax it’s citizens for much needed funds.
Taxes for Revenue are Obsolete,
American Affairs Magazine, 1941 I think, I have the article somewhere.
Beardsley Ruml, Fed chairman
Get rid of the penny, please.
After Obama is finished with this economy, you won’t be able to buy a cheeseburger for less than $100 trillion. So pennies will be kind of a moot point.
Few things scream “dying civilization” like debasing the coinage.
Make way for the plastic 57 cent piece.
If they got rid of ALL money, it would be so much easier for the Gov to track and tax all electronic transactions. Wouldn’t that be just lovely? /Sarc
I wouldn’t miss pennies as that coin is too small in value now due to the devaluation of fiat paper dollars. I’m a gold bug and think the present price of gold around $1050 US is as low as we will see it for a long time. Have some around as well as some sortable food, ammo and your favorite whiskey for trade purposes when all goes tits up.
“Since 2006, it has cost the US Mint more than face value to produce and distribute the penny and nickel” —
If it costs more than face value to do so . . . then we could just get our whole economy back in shape again, through various means such as lowering taxes, cutting spending, and reducing the deficit; and thus get ourselves back into the place where we were before 2006 . . .
Plastic with a chip in it........
Since 2006......
Isn’t that when the Dem House and Senate was elected?
It’s time once again to trot out my currency and coinage reform proposal.
Given that there has been ample inflation on the order of 10 since the last change, and we have an excessive array of confusing coins and low-value currency, it is time for a practical simplification.
First, denominations need to proceed in a proportional way without large value ratios or crowded ratios. The classic 1-5-10-50-100... progression with ratios of 2.0-5.0 is ideal as a minimum, with denominations of 2, 20, etc. being optional for important valuations.
Second, we want to avoid coins of such low value that they are more trouble than they are worth. Economic waste occurs with the extra time wasted dealing with needlessly small coins. A dime is worth less than a minute of labor at minimum wages, and no currency transaction requires anything smaller than this denomination. The penny and the half-cent served well as the smallest denominations when their values were that of today’s dime. Note that electronic transactions are often conducted in smaller units than our smallest coin, and that cash registers have been “rounding” (without bias up or down) to the nearest small coin for sales tax purposes for generations.
Third, we want to set the coin/currency transition at a practical level that avoids our wallets being overstuffed with small bills, or our pockets with too many coins. Coins should be suitable for purchases like a magazine, a coffee, a lunch, or a brief cab ride.
Fourth, the ratio between the largest and smallest coin should be limited to a practical factor. Consider that the economy functions effectively with coins at 0.05, 0.10, and 0.25, with pennies treated as trash, and larger coins generally not used. That is a factor of 5 between the largest and smallest coin. A factor of 10-50 may be ideal, and a factor of 100 (as in actual current coinage) is excessive.
Fifth, we need bills of adequately high value for large cash purchases (consider the largest Euro note has a value of about 7.5 times that of the largest US note).
Sixth, coins should be sized approximately proportional to their value for ease of recognition and use.
The proposal:
Coins:
$0.10 (slightly smaller than the current dime)
$0.50 (slightly smaller than the current nickel, larger than the penny)
$1.00 (slightly smaller than the current quarter dollar, larger than the nickel)
$5.00 (slightly smaller than the current half-dollar) Or it could be set at $2 to avoid overlap with a $5 note.
Currency Notes:
$5 (optional)
$10
$20 (optional)
$50
$100
$500
Our current 6 coins are replaced with 4.
Our current 7 notes are replaced with 4-6.
If you want to talk about making coins out of silver or gold, that’s another topic.
I will accept the above statement as true, but isn't the cost of these coins balanced by the profit made in producing papermoney? I presume it cost as much to print a $100 note as it does a $1 note. Shouldn't some of this "profit" cover the excess cost of minting the coins?
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