Canada ditches its penny: How about us?
Next month, Canada will withdraw its penny from circulation, and already there is talk in Canada of withdrawing the nickel, though if Canada keeps the quarter, there will be a demand for (if not an absolute necessity of) nickels also, because of the ending in "5".
The American 1-center, which costs 2 cents to manufacture even though it is no longer even made of copper, has no more value than its Canadian counterpart. Alone, it is as useless as the aluminum coins of the former East Germany. Carrying it around and counting it out is a waste of effort. Australians and New Zealanders chucked their 1-centers and 2-centers in about 1990, and we should do the same with our penny.
Of course there is a long tradition behind it. Though the metal has been cheapened, going from copper to zinc, pennies in the current size have been minted since 1857, which is before the Civil War. Lincoln pennies have been minted since 1909. But consider the decline in purchasing power. According to this Internet converter, a penny in 1909 was worth what a quarter is today. In my childhood in the 1960s a penny’s value had been seriously eroded, but you could still buy a gumball or a licorice whip with one. Not any more.
Let’s jettison the penny. But really, while doing this it is worth thinking about changing other coins. The nickel is also worthless. Furthermore, the nickel is larger than the dime, which used to make sense because the dime was made of silver, but the United States hasn’t minted silver dimes in almost 50 years, so that doesn’t make any sense either.
Here is my proposal: zero out the last decimal place. Chuck the penny, nickel and quarter. Keep the dime. Shrink the 50 cent piece to about the size of a nickel. Keep the $1 coin, so that there are 10-cent, 50-cent and $1 coins. Maybe add a $2 coin, as Canada has, or a $2.50 coin. Under this system, you could have cash for amounts in 10-cent increments, such $1.10, $1.20, or $1.30, but not $1.12 or $1.13. You could still pay amounts down to 1 cent in checks and bank transfers, but not in cash. The cash amounts would be rounded up or down by a general rule applied to all transactions.
Changing all the coins (except the dime) would cause the vending industry to howl, because thousands of machines would have to be made over. But it's going to have to happen if people are to use coins at all. Some of Seattle's parking meters are $4 an hour; to park for two hours takes 32 quarters. Who has 32 quarters? If we had a $2 coin, this could be done with four coins. The alternative is for more and more people to use debit and credit cards (which is how most people pay the meter in Seattle.)
I prefer coins--but I want them to be worth something. Americans need coins that have some value in them.
Achenblog by Joel Achenbach
Postman On Politics