Posted on 02/29/2008 8:55:38 AM PST by Sub-Driver
Treasury secretary wants to dump pennies
By MARTIN CRUTSINGER, AP Economics Writer 4 minutes ago
A penny for your thoughts? Treasury Secretary Henry Paulson thinks the answer to that question should be not much. In fact, if he had his way, he would like to get rid of the penny.
Asked Friday whether he thought the penny should be eliminated, Paulson agreed that it would make sense, saying, "The penny is worth less than any other currency."
However, he quickly added that he didn't think it was "politically doable" to eliminate the one-cent coin and it wasn't something he planned to tackle in the final year of the Bush administration.
"I've got enough challenges to take on," he said in an interview on the "Spike O'Dell Show" on Chicago's WGN radio.
O'Dell also asked Paulson, who made a fortune as the head of investment giant Goldman Sachs before joining the Bush Cabinet, how much money he carried in his pocket.
"I walk around with very little cash in my pocket," he said, depending instead on credit cards "like everyone else."
Paulson said he did carry a few dollar bills with him to sign for people who ask for autographs. The signatures of the Treasury secretary and the U.S. Treasurer are carried on not just the dollar bill but all U.S. currency.
(Excerpt) Read more at news.yahoo.com ...
I think the metal in it is worth more than the penny. Which means . . . instant profit! Helter Smelter . . . stick it to the man.
The metal in the penny is worth more than the penny itself. They actually had to warn recyclers not to accept pennies to melt down because people could turn them in for a profit. I say let the market take care of the surplus stock of pennies - just say they aren’t legal tender anymore. People can turn them in to recycle for more than they are worth. At the worst, you’ll be out four cents.
If the penny is deleted, then the nickel (which is 75% copper) will be worth less than any other currency. And all transactions (except some electronic) will have gone up in price significantly.
“The penny is worth less than any other currency”
Gee, what a genius!
If you melt a penny you are going to find you have copper plated alumninum.
You’d need pennies that are over 25 years old.
Exactly, our money would be much stronger if we were still spending silver dimes, quarters, half dollars, and dollar pieces.
It isn’t that the copper in an old penny is worth more than the penny, it is that our paper money isn’t worth the paper its printed on.
zinc
Current-manufacture pennies are zinc with copper coating. I have no idea what the value of the zinc content is.
I don’t recall when they made the switch; probably ten or twenty years ago.
Actually it is zinc. They switched in the early 1980s (maybe 1983). I remember because we could melt the new pennies in a bunsen burner in chemistry class, but not the old copper ones.
I think even the zinc ones are worth more than $0.01 in metal value.
Huh?
It's worth several thousand Zimbabwean dollars.
1982...pennies of both types were produced that year. And there are “large” and “small dates” to further confuse the issue.
Zinc is currently 2776.00 per metric ton.
I hate pennies, to be honest. I wouldn’t mind just rounding up/down to the nearest nickel..
I’ve got an early one that the plating chipped off on. They must have been working the bugs out.
It’s not as if people carry around pockets full of change anymore. Nearly everybody I know uses plastic. Less coinage use = less pennies needed. I think this is a manufactured crisis.
it would be inflationary to say the lease.
Everyting would be rounded UP to the nearest nickle.
IN A FEW YEARS IT MAY NOT MATTER:
The way people are going cashless, the printing of money will be ZERO. It will all be mere electronics.
Things are already being rounded up (or down) to the nearest penny (well most things anyway). And no one seems to care.
Sure it is...but only just!
Seriously, the solution is a "reverse split", such as happens with the stock of stumbling companies - one NewBuck for ten US Dollars. After such a "consolidation", pennies would be worth at least one cent.
Just kidding - no government would do anything so honest!
Well then, let’s just round up to the nearest dollar and be done with it.
Down the road the kids won’t get the Biblical story of ‘Rendering unto Caesar’ any more...
Copper has gotten really expensive in recent years. When I wired my house in about '96 a 1000' roll of 12/2 Romex was going for about $50. Now, it's about $250. I wouldn't be at all surprised if there were some folks trying to melt down pennies for the copper. They'll be in for a rude surprise if they do. 'Course, this is the same mentality exhibited by folks that go into live substations and try to steal the wiring, thinking it's copper. We had one of those a while back not too far from me. The guy fried himself.
We had copper coax stolen off a tower in Illinois when I was working a Sprint PCS project there and that was about 10 years ago when copper was much cheaper.....
That just happens in banana republics which have no control over their spending or currency. And I have to inform you that we are not a banana republic. Unfortunately we don't grow any bananas. :-P
I guess they truly want to “nickel and dime” us.
In Switzerland there’s no coinage below .05 (their value).
Every price is either an even dollar or with a .05 after it. Seems simple.
I’m afraid this all started back when they took away the gold,
then the silver,
then the copper,
anybody see a trend here???
The dollar isn't far behind!
I say keep the penny. I don’t feel like paying the four cent round up.
Current nickels are made mostly of copper, and worth about 7 or 8 cents in the copper value.
No, it's a manufacturing crisis. Everybody throws pennies into a drawer, or jar or whatever. They go into circulation and don't come back. So the US Mint has to make more every year.
Rationally, we should do away with the penny and have all transactions round up or down to the nearest nickle. Statistically, half of your purchases would be up and half down, so there would be no net gain or loss.
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 penny is worth less than a minute of labor at minimum wages, and no currency transaction requires this small of denomination. The penny and the half-cent served well as the smallest denomination when their value was that of today’s dime. Note that electronic transactions are often conducted in smaller units that 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 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 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 (the approximate size of the current dime)
$0.50 (the size of a current nickel)
$1.00 (the size of the current quarter dollar)
$5.00 (the size of a current half-dollar) Or it could be set at $2 to avoid overlap with $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.
Old fart time: I remember when standard US coinage in circulation was of metals with intrinsic value; copper, nickle, and silver. Even paper money was merely “certificates” redeemable on demand for silver. Coins were the normal currency with many preferring silver dollars over paper. This worked because prices were low. Prices (and income) were low, in part, because our “money” was based on reality, metals of intrinsic worth, which could not be inflated.
Now our money is fiat and our coinage base. It has no basis in reality. The government and Fed can and does inflate it to their grubby hearts’ content. The visible fly in that ointment has been our coinage...the last visible reminder of when the US citizens actually possessed real money.
The Treasury Department has strove mightily to preserve the image of US citizens possessing money. It has done so by producing coins which resemble real money, i.e. made with copper, nickle, silver, or gold. But as our currency continues to be devalued, it becomes economically prohibitive to produce coins with even the appearance of real money. The government’s solution; eliminate coinage in favor of fiat paper “money” and finally, electronic transactions.
The federal government’s first step to this solution is to abandon the penny. It wants to do so because it has drastically devalued our currency. And the lowly penny stands in visible accusation of the government and Fed’s debasing of our currency and destruction of the Republic.
No citizen should be cavalier about the passing of the penny. It puts us one step closer to complete electronic currency based on nothing...one step closer to the government’s complete control of wealth.
Doubtful - all pennies made in the last decade or so have been made of zinc with a copper wash... The metal probably isn’t even worth 1 cent.
lollercoaster
Since the ‘70’s, US exchanges and commissaries in Europe have not used the penny. Any price ending with a 1 or a 2 was rounded down, those that ended with a 3 or 4 were rounded up. I don’t recall any problem with prices being skewed to end in a 3 or 4 so that it would round up to the next nickle.
The reason why the penny was dropped was because it just cost too much for the US to ship them overseas.
I think it is probably fair to say that the current penny has less economic value than any other currency in US History. By a long-shot, I’d say. Maybe a factor of 5-10.
I got tickled when you hinted that anyone might round current prices down.
round up to the nearest nickel and deposit it in my saving account
Prices don't need to be rounded at all. Only the final transaction amount. And that could very easily be done so there is no long-term gain or loss. This week's grocery total might mean you pay an extra two cents. Next week, you'll pay two less. It all washes out.
And we have the Federal Reserve and inherent inflation of fiat money to thank for that.
Russia still makes 20 and 50 kopek coins. Care to guess how much they are worth? .8 and 2 cents.
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