Posted on 08/29/2012 3:46:56 PM PDT by GQuagmire
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 to any economic imbeciles: 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. Google “sales tax rounding” if you have doubts and read a few articles).
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 6.5 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, I’m even more enthusiastic:
$1000 gold coin (1 oz)
$500 gold coin (1/2 oz)
$100 gold coin (1/10 oz)
$20 silver coin (1 oz)
$10 silver coin (1/2 oz)
$2 silver coin (1/10 oz)
$1 copper or base metal coin (1/2 oz)
$0.50 copper or base metal coin (1/4 oz)
$0.10 copper or base metal coin (1/10 oz)
Note that the restaurant was rounding fairly (unbiased up or down to nearest nickel). When a few customers objected, they decided to round down every time.
Note that in many states, it is illegal to round up (to the nearest penny for sales tax calculations).
Here’s my coinage reform proposal:
No more coins
I'm fine wid dat - the "global economy" will either lead to global government or die, and I much prefer the latter.
But the Treasury and the Bureau of the Mint can't just start issuing specie without the means to safeguard its value.
“High penny roll”, the car loan sharks used to call it...but they only rounded up, never down. Millions of $ per year.
MICHAEL
It’s pretty brilliant. What it does is where there’s a bank
transaction, and the interests are computed in the thousands a day in
fractions of a cent, which it usually rounds off. What this does is it
takes those remainders and puts it into your account.
PETER
This sounds familiar.
MICHAEL
Yeah. They did this in Superman III.
PETER
Yeah. What a good movie.
It is funny that you say that, I just finished my daily collection routine. I always ask for change so that I can get as many pennies and nickels as I can. I also ask for any strange or unusual coins. I can often get old valuable coins. I save all pennies 1981 and before and I throw all nickels in a jug.
I have found that I can save money and possibly make money down the road when we can sell currency for the value of the metal.
At any rate, my son enjoys learning about coins and I get to spend time with him just talking about our day. It has become a ritual for us.
That’s the way to go. Coins suck. That’s why we keep rejecting dollar coins.
We will cease rejecting the dollar coin.... when the dollar bill ceases.
It’s time to revalue the dollar is what it is. Replace the current dollar with a new dollar that’s worth 100 times more and then a new penny will have a value. It might even be worth minting copper pennies again.
Australia abolished their pennies years ago. All retail transactions have a “rounding” entry, which adds or subtracts 1 or 2 cents. So long as the remainder in the price before rounding is uniformly distributed, on average, in the long run, the consumer and the retailer come out even. It has exactly the same effect as a “take a penny, leave a penny” cup which is always stocked, and which the consumer must take one or two pennies from, or leave one or two pennies in, when their total purchase after sales tax is added is not divisible by five cents.
We should do likewise, change the metallic content of “nickels” (or rather five-cent pieces) so they cost less than five cents to make), follow every other major currency in having the basic unit of currency be a coin, and while we are at it, get Andrew Jackson off the currency except in an’every President’ series of dollar coins (replace him with Ronald Reagan on the $20 bill).
We will cease rejecting the dollar coin.... when the dollar bill ceases.
One slight problem with your otherwise laudatory concept. The Democrats will fight beyond death to keep FDR and the libertarians will do the same to kill him on the dime. Note that of all US Mint coinage, only the FDR Dime has never had an alteration since inception (IIRC).
Good luck, but I will bet on another horse.
For “assembly-line style food”, I have to say that Chipotle does it very well. The menu is limited but as you can customize it and see it being assembled as you walk along the counter, you have a lot of control over what you get. And the food is very tasty and fresh and consistent and the service is friendly and extremely fast. And that sort of thing is very important for the lunch trade.
When I worked in Maryland there was a Chipotle across the street from my office and a Chick Fil A on the other corner and I used to frequent both for lunch when I didn’t brown bag it, and being a “cheap skate” – I brown bagged it most of the time ; ) , But what I found was that unlike most “fast food” places, my order was never messed up nor did I ever have a bad meal or bad service at either of those places. I can also say the same for Panera Bread BTW.
The last time we dumped the lowest value coin was the half cent shortly before the Civil War. It was worth a little more than a dime is now.
If this is, as I presume it to be, an honest rounding, then I see no harm except for the person ordering the same thing week-in week-out that is always rounded up.
There is a precedent, a big precedent for this, the US Government and its IRS tax collectors. Tax returns are always rounded to the nearest dollar for anything but handwritten submissions. If you do submit handwritten tax return, it automatically gets delayed a minimum of 6 weeks.
So, for me, this Chipotle policy is a non-issue!
No $1? Airport bagmen, doormen, other professions don’t get paid?
Waitresses and bartenders and will benefit (at first). I was drinking (ok, so I was the DD and this was the only reason I noticed) in Canada and I noticed that the bar we were in was conveniently out of C$5 bills and were counting out $1 and $2 coins to American customers.....who customarily leave all coinage as tips......
Imagine breaking a $20 and counting out $9+ in coins and your drunk friend waives it off as a tip.
If the rounding policy helps the line move faster, I’m all for it. Time is money, and the sooner I have a good burrito in my hands the better the value. And Chipotle makes a very good burrito.
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