along with the stupid penny. The $4.99 and $6.99 and $1999.99...Duh...Like I think we figured it out!!
Reading the headline of this post, you might wonder why it is newsworthy that a nickel is worth a nickel. The answer is that around this time last year, a nickel was worth almost a dime! I'm talking about the melt value of the U.S. nickel coin, which is actually made out of 75% copper (and 25% nickel.)
[snip]
Nickels always seem so useless...That’s a coin that should be discontinued....
along with the stupid penny. The $4.99 and $6.99 and $1999.99...Duh...Like I think we figured it out!!
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.