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The last-ever penny will be minted today in Philadelphia

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Re: The last-ever penny will be minted today in Philadelphia

#831

Post by jxramos »

alright2565 wrote: post #693
jxramos wrote: post #685

What would it take to shift the balance of inflation to restore the purchasing power of the penny? Just out of curiosity how does a government and a people and their economy go the other direction?

Deflation is an economic disaster. The Great Depression, for example, was related to deflation.

I don’t know one way or another but what specifically are the pain points of deflation and how do those compare to the never ending inflation? I’ve lived under inflation all my life, it’s a slow creeping nearly sub threshold insidious process that erodes the value of money. Buy what is life like under deflation, is there pain but ultimate correction to a sane state? It feels like there is no correction to inflation.

Re: The last-ever penny will be minted today in Philadelphia

#832

Post by dragonwriter »

jandrewrogers wrote: post #594
pyth0 wrote: post #501

Earlier quoted context omitted.

Can you explain further? Canada has sales tax and successfully phased out the penny.

Sales taxes in the US are truly and insanely decentralized. The US has thousands of independent sales tax authorities with their own laws and regulations about how sales tax must be computed and displayed. These jurisdictions overlap, the sales tax you pay may be the aggregate of multiple different sales tax authorities between which there is no coordination. Rounding to the nearest 5c or whatever creates a situation…

> the US has thousands of independent sales tax authorities

The US does not have thousands of independent sales tax authorities; administrative subdivisions of states are not independent, or even sovereign in the sense that states (which are also not independent) are, and can be dictated to by the state they are in, if the state decide there is a need, such as an urgent common problem that requires a coordinated solution.

> It really is a "herding cats" problem.

It's not, though. It's a "convincing cats to find shelter when it rains" problem, that you are trying to make harder by inventing the nonexistent need to also gather them in a herd. They aren't in a herd with the penny as the smallest coin, and they don't need to be in a herd if that changes to a nickel.

> Even at the level of all 50 States, resolving these kinds of coordination problems typically takes several decades.

There is no need for a coordinated solution between all 50 states, just as there is no coordinated policy on sales tax now between all 50 states. All that is necessary is that there is a solution in every place where the current tax policy would be problematic without the penny. There is no need for the policy to be the same in every jurisdiction with sales tax, just as the status quo policy is not the same in every jurisdiction with a sales tax.

Re: The last-ever penny will be minted today in Philadelphia

#833

Post by jacquesm »

Night_Thastus wrote: post #141

I'd say screw it, get rid of nickles and dimes as well. Quarters can stay, for now. It's a complete waste of money and time continuing to mint such low-value currency. It can't be used for just about anything. Unfortunately, I do see the problem with part of this. For a handful of items where it does matter, it will force people to use cards more if they want to avoid rounding. And the card providers already have a c…

So why would you drive to increase that choke hold?

Cash is the way for small retailers to allow people who have very little money to stay away from the lure of easy credit. If you force them to use cards they will lose track of their spending completely and that will surely not help.

Re: The last-ever penny will be minted today in Philadelphia

#834

Post by ebruchez »

afavour wrote: post #100
ahmeneeroe-v2 wrote: post #80

Earlier quoted context omitted.

American banknotes have numbers on them to easily distinguish the different values!

> The United States is the only country that prints all denominations of currency in the same size. The US and Switzerland are the only two countries that use the same colors for all of their various bills. Needless to say, this sameness of size and color make it impossible for a blind person to locate the correct bills to make a purchase without some sort of assistance, or confirm that he or she has been given the c…

> The US and Switzerland are the only two countries that use the same colors for all of their various bills.

Factually absolutely incorrect for Switzerland, and easy to verify. Swiss bank notes are and have been some of the most colorful (and pretty, I should say) around, and all have different sizes.

Re: The last-ever penny will be minted today in Philadelphia

#835

Post by seanmcdirmid »

EasyMark wrote: post #713
seanmcdirmid wrote: post #672

Earlier quoted context omitted.

So lets just adopt low overhead (read cheap) wireless QR-based payments like China has? Is there really a good reason to do cash anymore? We don't have to choose between expensive credit cards and cash, there are other solutions out there that are taking over the rest of the world.

The big reason is less government traceability and surveillance. People like cash, we don't need everything to be digital and easily controlled. The fact that China does it doesn't really give me a lot of confidence that it's necessarily an awesome idea.

It’s not just China though, it’s almost every country going through a cashless transition at this point, so if it is awesome idea in Chad and Laos as well as Sweden and Australia, what does it mean elsewhere? Are we the only country that is rich enough to avoid a transition? The biggest issue in the states is that given a choice, the cash holdout businesses become increasing larger targets for theft (eg marijuana dispensaries in the Seattle area) as other businesses opt out.

Re: The last-ever penny will be minted today in Philadelphia

#836

Post by jandrewrogers »

dragonwriter wrote: post #826
jandrewrogers wrote: post #433

Earlier quoted context omitted.

Sales taxes as they are known in the US were largely introduced in the 20th century. The half-penny was phased out in the mid-19th century. The legal structure of sales taxes in the US present some unique challenges that simply don't exist as problems that needed to be solved in other countries. These problems can't be legislated away because the authority to do so is highly decentralized. Pretending that these probl…

>These problems can't be legislated away Yes, they can. > because the authority to do so is highly decentralized. So are the problems. And the places where the problems are localized to are the ones with the power to legislate them away. An abrupt elimination of the penny, such as them being immediately banned for use or withdrawn from circulation, would present a problem, sure, but stopping minting them while leavin…

The urgency is quite irrelevant. In many locales you will still have to ask voters for permission and/or have a constitutional referendum in addition to having the local legislature acquiesce. All of those parties can do whatever they want and a large percentage of them don't understand and DGAF. This dynamic plays out over and over for countless issues, this is no different.

In the meantime, tax authorities will require compliance as the law demands without any regard for another tax authority requiring something different.

I'd be perfectly happy for pennies to disappear but I am not ignorant of the realpolitik that makes implementation nearly impossible. Wishful thinking won't make it so.

Re: The last-ever penny will be minted today in Philadelphia

#837

Post by axiolite »

mulmen wrote: post #786
toast0 wrote: post #574

Earlier quoted context omitted.

It might be a little bit cumbersome, but I don't think it's impractical. With only quarters and dimes it's difficult to pay $0.05 or $0.15, but it's possible. If I owe you $0.05, I must give you a quarter and you give me two dimes. Or I give you a $20, you give me $19 in paper money, three quarters and two dimes. If I owe you $0.15, I must give you a quarter and you give me one dime. If I owe you $0.95, I can't give…

> But, if we stopped minting pennies because they cost too much (3.7 cents), it's hard to imagine we're going to keep producing nickels when they cost 13.8 cents to mint. Dimes are much cheaper than nickels (5.8 cents), and quarters aren't too bad relative to face value (14.7 cents). Coins aren’t disposable. Why does it matter if the production cost is higher than the face value?

> Why does it matter if the production cost is higher than the face value?

You can buy pennies or nickels in bulk, melt them down, and turn a tidy profit. That's literally a "money printing glitch"

Every penny or nickel that gets lost in the gutter, stored in a coin collection, used as a washer or shim, turned into jewelery, or sets around in jars unused, represents a financial loss to the Treasury.

It's called seigniorage and melt value. Also see Gresham's law (hoarding).

Re: The last-ever penny will be minted today in Philadelphia

#838

Post by [deleted] »

BobbyTables2 wrote: post #824
simpleguitar wrote: post #273

Earlier quoted context omitted.

As the article points out, there are laws that say people who pay via SNAP debit cards "cannot be charged more than others". If cash payments are rounded down, but debit card payments aren't, they are in violation of state law. The article also points out that rollback of pennies in Canada and other places were planned, addressing these kinds of issues. USA is doing it with no such planning.

Get rid of SNAP. Problem solved. (/s)

[deleted]

Re: The last-ever penny will be minted today in Philadelphia

#839

Post by sschueller »

Night_Thastus wrote: post #141

I'd say screw it, get rid of nickles and dimes as well. Quarters can stay, for now. It's a complete waste of money and time continuing to mint such low-value currency. It can't be used for just about anything. Unfortunately, I do see the problem with part of this. For a handful of items where it does matter, it will force people to use cards more if they want to avoid rounding. And the card providers already have a c…

Quarters don't make sense to me. We don't have $25 notes either why should be have 25c coins?

Re: The last-ever penny will be minted today in Philadelphia

#840

Post by mulmen »

axiolite wrote: post #837
mulmen wrote: post #786

Earlier quoted context omitted.

> But, if we stopped minting pennies because they cost too much (3.7 cents), it's hard to imagine we're going to keep producing nickels when they cost 13.8 cents to mint. Dimes are much cheaper than nickels (5.8 cents), and quarters aren't too bad relative to face value (14.7 cents). Coins aren’t disposable. Why does it matter if the production cost is higher than the face value?

> Why does it matter if the production cost is higher than the face value? You can buy pennies or nickels in bulk, melt them down, and turn a tidy profit. That's literally a "money printing glitch" Every penny or nickel that gets lost in the gutter, stored in a coin collection, used as a washer or shim, turned into jewelery, or sets around in jars unused, represents a financial loss to the Treasury. It's called seign…

No, you can't. According to [1] the scrap value of a penny is $0.0084771. The cost of production is $0.037. The relevant question is if a penny creates more than $0.037 of economic value before it is lost or destroyed.

[1]: http://coinapps.com/base-metal/coin/calculator/

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