Whenever I get change for a dollar, I ask the cashier to keep the pennies. They aren’t worth my time, or hers, or yours. Sometimes the cashier refuses for bookkeeping purposes, in which case I politely accept the pennies and then throw them in the nearest trash can. (Is this illegal? Maybe so, but then so is throwing pennies into a wishing well.)
If I were the type of person who regularly a) loaded up my pocket every day with loose change or b) brought all my loose change to a bank or supermarket coin machine, then it might be worthwhile to keep the pennies. But I’m not, and so it’s not. These facts, coupled with the fact of inflation, have led me to wish for years that the penny would be abolished, and probably the nickel too. (When we were kids, playing Monopoly, we never used the $1 or $5 bills; did you?)
But now, at long last, there is a sensible alternative solution to throwing away loose change: “rebasing” the penny to make it worth five cents. The plan comes courtesy of Francois Velde, an economist at the Chicago Fed. Austan Goolsbee has a nice writeup on the subject today, including the necessary history and objections.
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I love this plan. Just give me a month’s notice so I can go convert my life savings to pennies, hang on to them, and suddenly be worth five times as much.
I love this plan. Just give me a month’s notice so I can go convert my life savings to pennies, hang on to them, and suddenly be worth five times as much.
Oh, yes, we did use the $1 bills while playing Monopoly. Otherwise, how do you pay the rent on the various properties? Did you just round them up to the nearest $10?
Oh, yes, we did use the $1 bills while playing Monopoly. Otherwise, how do you pay the rent on the various properties? Did you just round them up to the nearest $10?
The yen and the penny are approximately equal in value. Yet, you will not see a one yen coin in Tokyo. You might get one in a less populated area. There is a .01 Euro coin that I attempted to use in Paris, but instead, the cashier stared at me and demanded real money. I attribute the continued use of pennies in our country to our stupidity. We seemingly can’t round 99 cents to the nearest dollar, so I doubt our society is smart enough to adopt the Francois Veide solution.
The yen and the penny are approximately equal in value. Yet, you will not see a one yen coin in Tokyo. You might get one in a less populated area. There is a .01 Euro coin that I attempted to use in Paris, but instead, the cashier stared at me and demanded real money. I attribute the continued use of pennies in our country to our stupidity. We seemingly can’t round 99 cents to the nearest dollar, so I doubt our society is smart enough to adopt the Francois Veide solution.
Mr. Goolsbee needs to check his facts a touch. The Europeans may have dumped their smallest demonination coins, but we’re still stuck with the penny here in Canada. We’d be quite happy to see them go as well.
Mr. Goolsbee needs to check his facts a touch. The Europeans may have dumped their smallest demonination coins, but we’re still stuck with the penny here in Canada. We’d be quite happy to see them go as well.