Transterrestrial Musings

Comments

You mean like the $5 bill :-)

Posted by Dan Schrimpsher at May 1, 2006 08:19 AM

How would you get back exact change without pennies?

Posted by hyper at May 1, 2006 08:55 AM

How do we get back exact change without ha'pennies? Just round all transactions to the nearest nickel.

Posted by Rand Simberg at May 1, 2006 09:07 AM

Rand beat me to it. We already have ridiculous sales taxes such as 8.75% in some places. There's no way to get a whole penny value with taxe rates such as that.

Problem is, WalMart prices merchandise at xx.97 or xx.96 to maintain their "low price guarantee". If everything gets rounded to the nearest nickel, most of the pricing schemes that are used to lure in customers would be moot.

Methinks you'd have to wait for the mythical "gas price crisis" to be over before you could even think about telling people that they're going to have to pay 2 cents more for their $5 cup of coffee.

Posted by John Breen III at May 1, 2006 09:14 AM

There's nothing necessarily bad about pennies that cost more than one cent to make. What would be bad is pennies that could be destroyed to yield more than one cent in scrap. A solution, short of eliminating them entirely, would be to go to steel or plastic coins. Steel coins were used for three years during WW2; we'd probably want to color them in some way to avoid confusion with dimes. The Cocos-Keeling Islands famously had plastic coins back in the 1960s.

Posted by Paul Dietz at May 1, 2006 09:19 AM

A company like Wal-Mart could give out its own plastic pennies if it wanted to. They'd be redeemable as part of future purchase, or they could even offer a discount: turn in 400 and get a Lincon $5 bill! (Limit one transaction per day per customer)

Or they could introduce a buyers card, and have pennies added as "points" which are redeemable when you accumulate enough of them.

Some stores would advertise that their prices are "rounded down", just to show what great guys they are, too.

All of these would be a way to encourage their customers to keep coming back, the way those grocery card promotions do. (Sunday I saw a woman come up $6 short this month on getting her 10% discount on her next month's purchase, so she had to go back and buy something more. Now if you think about it, her next purchase had better be at least $60 and that $6 she just spent had better be something she really wanted/needed, or she lost out on the deal...)

Personally, though, if we are getting rid of the pennies, I think we should go all the way and include the nickle, and so start just rounding to the nearest 0.1 dollar.

Posted by Raoul Ortega at May 1, 2006 09:53 AM

This idea isn't new. I was manager of a delivery pizza shop in the mid '70s. We rounded all our prices up or down to the nearest nickel. It worked so well, 6 months later we rounded to the nearest quarter. It eliminated many problems, i.e. keeping vast amounts of change, counting change every night, bank deposits, pizza delivery speed increased and it actually increased tips to the drivers.

We could eliminate the penny and the nickel too. Do we really care if an item costs a dime one way or the other? Not much difference in $4.91 and $5.00.There's even less difference if you buy a tank of gas and it's $44.91 or $45.00. If we are loosing money minting pennies, the nickel should be scratched too.

Posted by Steve at May 1, 2006 10:28 AM

How about we move Lincoln to the dollar coin and get rid of the one dollar bill? I'd keep the nickel though, and just let shops round off. Remember, the penny would still exist for checks, EFT transactions, and so forth - it'd just be for the increasingly infrequent cash transactions that the penny would go away.

Shops might compete with "We Round Down" signs. Half the time that's what goes on at the cash register anyway.

Posted by Jane Bernstein at May 1, 2006 10:33 AM

If pennies are discontinued, what will I throw off the Empire State Building?

Posted by Tom Shembough at May 1, 2006 10:49 AM

Aha! You can buy a single 1 cent stamp with 1 penny.

Posted by Robin Goodfellow at May 1, 2006 11:31 AM

Yes, but you can't buy any postage services with a single one-cent stamp...

Posted by Rand Simberg at May 1, 2006 11:42 AM

When our country started using the euro currency, we didn't take the 1 and 2 euro-cent coins to use at all, the smallest one is the 5 cent copper one. (Other euro countries do have the 1 and 2 cent coins.) Makes handling cash easier. Sure, when you buy bananas by the kilogram, there's some more rounding errors, but who cares?

Someone said that the smallest coin should be valued so that people still bothered to pick one up if they saw it on the street. :)

I think the too small coins are just a nuisance.

Posted by meiza at May 1, 2006 11:44 AM

Rand,

While you can't buy any complete postal service with a 1-cent stamp, if you still have older postcard stamps, you can purchase the "make-up" stamp to get to the current postal rates.

If you mandated the removal of the penny from the currency system, you would need to buy them all back and melt them down, or you would end up in a situation where people have gobs of coins that were completely worthless. Since the government minted 7.7 BILLION pennies last year, the chances of being able to get them out of circulation are pretty low. And, as meiza alluded to, if you completely de-value pennies, nobody will bother picking them up on the sidewalk and you could end up with a litter problem as well.

While I can't agree with everything that they do in Canadia, I think that $1 and $2 coins (Looneys and Twonies) are a VERY good idea, and should be more prevalent in the US. It's just tougher to get a Sacajawea to stay in place if you slide it under a garter or g-string...

Posted by John Breen III at May 1, 2006 11:56 AM

"Since the government minted 7.7 BILLION pennies last year, the chances of being able to get them out of circulation are pretty low."

I'll translate: The government spent more than 7.7 BILLION CENTS last year minting pennies. That's more than 77 million dollars _spent_ on making something that is worth _LESS_ on the market.

You don't have to 'get them out of circulation'. All you have to do is stop minting them. And allow companies to round _IF_ they have it visibly posted at the counter. 'We round transactions to the nearest nickel'.

That's it. Companies that live & die on 'penny transactions' (if there are any) aren't sizably impacted for a very long time. They'll be able to request pennies the same way they always have from the bank. They should be able to do that for a very long time once the 'demand' for pennies has dropped precipitously as all the non-penny-oriented businesses stop getting rolls from the bank.

The litter problem is specious as well. We haven't _devalued_ them. They're still worth a penny. They just aren't minted anymore. (The "value" should actually go _up_.)

Posted by Al at May 1, 2006 12:30 PM

If nobody will accept a penny anymore, they are essentially devalued to anyone outside of numismatic circles. And a coin that has a few trillion copies in existence is probably not worth much to a collector, either.

A penny is of no use to me at work, where all vending machines and parking meters reject them. If I collect enough pennies, I can turn them in to a bank for something of value that will be accepted at stores.

Numismatic societies may value a penny at more than 1/100th of a dollar if they were no longer in circulation, but if nobody but a bank will accept them as currency (not a ridiculous conclusion to come to, based on current acceptance practices in coin-based business), then a penny is only worth as much as the metal you can melt it down for (in this case, $0.008).

Posted by John Breen III at May 1, 2006 12:53 PM

or you would end up in a situation where people have gobs of coins that were completely worthless.

And the problem is? Coins have been phased out before. It's nothing new. The EU just did that with the introduction of the Euro. In fact, it's astonishing that in the US one can still use (if they really want to) many century old coins for modern transactions.

Posted by Karl Hallowell at May 1, 2006 01:09 PM

A penny is of no use to me at work, where all vending machines and parking meters reject them.

I find I have very little use for coins. The vending machines at work take magnetic cards. The toll booths around Chicago charge twice as much for coins vs. transponders, and the latter are more convenient. We end up dumping our coins into a jar and periodically taking the jar to one of those 'cash for coins' machines in the local grocery stores.

About the only thing I use coins for are quarters for the self-serve car wash. Eventually, vending machines will go to an electronic scheme through your cell phone; this is happening more in Europe, I understand.

Maybe we should just get rid of cash entirely?

Posted by Paul Dietz at May 1, 2006 01:18 PM

Maybe we should just get rid of cash entirely?

I certainly try to minimize it as much as possible. It's inevitable, because at some point manufacturing technologies are going to make it impossible to have counterfeit-proof currency. We've seen the beginnings of this with high-quality color copiers, and it's going to become harder and harder for the Treasury Department to keep ahead of the game. The ironic thing is that it might force us back to hard currency (as in gold or platinum).

Posted by Rand Simberg at May 1, 2006 01:59 PM

Paul,
Not sure where you write from but we here in Raleigh, NC could do away with c@sh now. I can go to almost any store or any place that needs a monetary transaction and use my Debit / Credit cards. Some places even take the Debit and not the Credit cards. It took some time to get the non-c@sh transactions here, and it's almost complete now. Oddly, the government offices resist. The DMV and court systems still want c@sh or checks.

I lived near Bakersfield, CA. in 1991 and 1992. I sometimes literally carried the same $40.00 or $50.00 c@sh around from one payday to the next. The small town I lived in, Taft, got to the point where it was hard to use c@sh after 8:00 or 9:00 P.M. Businesses knew those electronic transactions couldn't be stolen in a hold up.

When I moved back to NC, dealing with c@sh again, drove me nuts. Thank God, NC is now as good as Bakersfield. Wait, is that an improvement?

Posted by Steve at May 1, 2006 02:14 PM

I could do away with cash, too, but with my bank's service fees on Point-of-Sale debit card transactions, I try to use cash if I have it on-hand. And because of the inordinate service fees that the owners of small businesses have to pay on credit and debit transactions, when I'm doing business at a small store, I prefer to use cash to save them the overhead.

"Plastic" is quite convenient and has made life at Fast Food restaurants and the grocery store much more convenient (I used to write a few dozen cheques a month), but until a lot of the service fees are reduced (doubtful that will happen any time soon), I'll still prefer cash in quite a few situations.

Posted by John Breen III at May 1, 2006 03:26 PM

If the penny, and the nickle are useless, how about we create a state/fed mandated requirement that all transactions (in american currency) must be reduced by 5%?

I don't think the problem is the flaw in the ITEM! but in the economy, when the foundation of the economy is no longer valuable.

For instance, what if the dollar was without value? would we have only $5's and above?

The problem isn't the currency, the problem is the excercise of currency, we can hike interest rates until the penny has value again, however, the problem isn't that extreme. (as mexico, and japan, and china and every other nation has had)
It is about redefining actually internal currency values, since the government controls real currency values they can do that easily.

The problem is that you are working in one direction, rather than the other.

Think about it.

If a nickle is in essence a penny, then we are FORCING a kind of irreconcilable inflation (spelling on the irr word) How about we just make the penny 5 times more valuable? or we can move in small modes.

we can make the penny 2X 1 penny, in basic value.

I know that science and retail guys are smart when it comes to math, and while pennies, in production are more expensive then the materials and efforts contained in their production, but how about this?

1 penny, changes hands thousands of times, if not millions, pennies are the most coninuous, but the least substantive portion of the mint.

Okay, here.

The "worm" program, about stealing fragments of pennies from everyone who ends up with fractions of 1/100th of a dollar?

If you remove the penny from circulation you end up with 2 affects. You end up with the reciever of the nickle, doing tax calculations, and ending up with more than they are old and keeping it, and you end up with those who do tax calculations and ending up with less than they paid in which case, EVERYTHING will increase by 5%.

Removing the penny from circulation will make a "less than one" conflict of taxation to a "0-5%" conflict of taxation, UNLESS the economy normalizes fixing the conflict of the nickel, and redefine it as a penny. In which case, the nickel will quickly become just as expensive, in fact more expensive than the penny, cuz it is a nickel.

Adjust the economy to suit the penny, change the materials of the penny. I think the greatest way to reduce the "cost" of having a penny, is to use the fact that we have enough computer power to formulate pretty much any known formula the planet could every face, as long as we have the right formula. . . . . .how about we

Track every "less than 1" calculation at a federal level for income, and at the state level for "sales tax"/"consumption tax?"

increase the value of every penny by 2 or 5, by federal exchenage, collect at a national and state level the fractions of a penny/nickle, and use that in the same way we use the gas tax? Social programs built on "overflow" rather than direct taxation?

This is a complex complex matter, and frankly, I'm offended that a scientist who thinks in metrics of 1,10,100,100 etc, would think it's a good idea to move from a 1/100 method to a 1/20 method. What happens tomorrow? 1/78.92342347989332990218340987134912387

Calculation of a man made currency? WE define currency, not currency us.

Sorry I was so wordy, but I think the "kill the penny" argument is backward. It should be "make the penny valuable" If we destroy the penny, then it will be the nickle, and then the dime, and then we would have gone down a road that is virtually losing until we end up like mexico and we have to completely redefine the metric until we destroy the dollar for some years, just like mexico. Because with the penny, nickel, dime, quarter, etc, we will ultimately have to destroy our currency until we can redfine that a dollar is a dollar, not a penny, and a penny is now a dollar. Mexico went through that.

Posted by wickedpinto at May 1, 2006 03:54 PM

England got rid of the equivalent unit of currency in the 1980's. I like to use this sort of thing as a proxy to measure the extent to which vested interests are obstructing good governance. Other issues are less recognizable...

Posted by Kevin Parkin at May 1, 2006 06:07 PM

The toll booths around Chicago charge twice as much for coins vs. transponders, and the latter are more convenient.

The IPass may be more convenient for you, but for someone who used to drive to Chicago from Milwaukee 3 or 4 times a year the new toll system is a considerable disincentive.

Posted by triticale at May 1, 2006 06:43 PM

Anybody who thinks that Canadian $1 and $2 coins are a good idea has never talked to a Canadian. Every one I've talked to hates the Loonie. They view it as yet another government idea implemented because it's "good for them."

Besides, it's Canadian, meaning that a $1 coin is worth about the same as a US quarter...

Oh, and you can also count me in as somebody worried about the penny litter problem.

Posted by Bill Fold at May 1, 2006 07:12 PM

I dunno I made pretty good money as a kid scrounging up loose change and cashing in sacks full of pennies. Althought I will admit that since the advent of the debit card my need for a loose change canister has become nearly obsolete.

Posted by Josh Reiter at May 1, 2006 07:47 PM

I think people are making too much of the case for keeping the penny. Noncash transactions could still be accurate to the nearest cent, or mille if so desired, while cash transactions would be rounded to the nearest nickel or dime.

This would not be unprecidented, the mille is still an official "money of account" according to the US government, and had been coined in the past. The same for the half-cent as well.

Posted by Robin Goodfellow at May 1, 2006 09:25 PM

"Besides, it's Canadian, meaning that a $1 coin is worth about the same as a US quarter..."

Used to be true. Getting less so all the time.

In Jan 2002 the Canadian buck reached a low of about 62 cents US. However, Canada exports a lot of oil and other commodities (gold, wood). Given the current commodities boom, the C-buck has been rising strongly and is now at about 90 cents.

If the China/India driven commodity boom continues for another year, you will likely see Canadian dollars worth more than the US buck for the first time since 1957.

Posted by Doc Brown at May 2, 2006 04:51 AM

The IPass may be more convenient for you, but for someone who used to drive to Chicago from Milwaukee 3 or 4 times a year the new toll system is a considerable disincentive.

For a person who drives that infrequently, the extra cost is minimal. They're optimizing the system for the most frequent users, and reducing (or reducing the worsening of) overall congestion in the process; even the occasional non-transponder user benefits from that.

I understand IPass interoperates with some similar systems elsewhere (Mass, NY Turnpikes?). Ultimately, the transponders should just be built into the cars and be usable anywhere in the country.

Posted by Paul Dietz at May 2, 2006 06:42 AM

This would not be unprecidented, the mille is still an official "money of account" according to the US government...

And at gas stations. That danged nine-tenths-of-a-cent-per gallon annoys me even when I know that eliminating it would cost me an extra 2½ cents every time I fill my tank.

Frankly, if we can do away with the penny, we can damn well do away with that pretentious pricing convention.

Posted by McGehee at May 2, 2006 07:20 AM

Ultimately, the transponders should just be built into the cars and be usable anywhere in the country.

This is a good thing?

Posted by Leland at May 2, 2006 07:39 AM

Not to change the discussion from pennies to I-Pass, but since when is a toll booth system a GOOD thing?

The current toll laws on the Illinois Toll Road system were put in place in an attempt to force users to rent the transponders (you only technically purchase it if you never return it). In fact, Blagojevich stated that the reason they were increasing the cash rates was to give people an incentive to purchase a transponder. In reality, it hasn't increased the use of transponders nearly as much as it's increased revenue, because people's habits are their habits, and out-of-state visitors aren't going to drop 10 bucks on a transponder. But he talked a good game and still suckered people into buying into the idea. There were much better ways to promote the I-Pass system, the least of which was an on-line ordering system and order forms and flyers at all the toll booths, instead of colluding with store owners to only sell them in Jewel grocery stores.

I can GUARANTEE that removing the toll booths altogether (as it was originally supposed to be when they were first put in) would do more to alleviate congestion than bullying people into getting I-Pass transponders. But it wouldn't mean as much money for the state, and the "poor, put-upon" toll-booth workers would be out of jobs.

The current trend in IL, if I believe the signs over the toll roads, is for "open road tolling". Yes, that's just the way to go. Create the ability to charge me while I'm moving at any speed, anywhere on the road, and track my movement with a transponder. How can this be a good thing?

Why the good people of IL continue to put up with such schemes is beyond my comprehension. It's also part of why I moved to Iowa.

(note: I, too, have an I-Pass. I got it 3 years ago, before the new toll schemes. But I got it because it's a pain to deal with cash tolls on a motorcycle. I still don't agree with the toll-roads, and avoid them as much as possible when I'm in IL.)

Posted by John Breen III at May 2, 2006 07:54 AM

Bill Fold,
I worked extensivley in Canada over that few years where Loonies and Twoonies came in. And Canadiens did complain about the coinage vs the bills. But the complaint was that the government didn't pass on the savings to the people in lower taxes.

I expect that if we kill the smaller coins or dollar bills, the same arguement will be heard. But if you do the math, if the government saves $77 million, that's about 25 cents each per American citizen. WOW! How would I spend such a windfall??

The real issue here should be if EVERY government agency could save $77 million next year we'd be a lot better off. It has to start somewhere.

Not to mention the prices of goods going to equal amounts instead of cr@p like $19.99 or 17,999.95. I don't imagine too many people discount the difference in costs of items in a penny or nickel when making a purchase.

"I'm glad that milk is $2.95 a gallon, if it was $3.00 I'd never be able to afford it!"

"We looked into buying a new car, but we were a nickel short of a decent down payment."

Even if you divide a nickel into an hours wage at MINIMUM wage it's 1/103 of an hours wage, or roughly 35 seconds labor. I realize people who make minimum wage need to be frugal, but I doubt a nickel is being watched that closely. I won't address the penny at all.

Posted by Steve at May 2, 2006 08:34 AM

This misrepresents the concept. 'Open Road Tolling' means toll plazas will now have several express lanes without dividers. When you drive through the plaza on those lanes, you pay the toll without slowing at all. It does not involve paying tolls at arbitrary locations on the toll road.

Tolls are good in this sense: they charge consumers for actual use of road capacity, not for something that is only roughly correlated with that usage (as gas taxes would be). This increases economic efficiency.

Posted by Paul Dietz at May 2, 2006 08:46 AM

Steve,

It's not that people can't afford to pay the penny for the difference between $19.99 and $20.00, it's that there is a significant (and proven) psychological reason for such a pricing scheme. People did, and still, tend to ignore much of anything past the first couple of digits of a price. Cars priced at $15,999.95 will get more attention than cars priced $16,001.00, even if the car priced at $16,001.00 comes with a free 20 oz. soda. Even though most people have the intelligence to know that they're really paying almost $16k for the car, our brains still find a way to ignore that.

I still find myself falling for the same trickery, no matter how much I try to train my brain to ignore it.

Posted by John Breen III at May 2, 2006 08:57 AM

Paul-

I apologize for mis-representing the concept of open-road tolling. I'm still distracted by the "sorry, we don't know how to pave a road, we'll re-do it in the spring" signs and the horrendous road surface on I-88.

I understand that it's a way to increase the number of "I-Pass Express" lanes at toll booths. But by the same token, it seems to me that, once the technology is perfected, it's not much of a sretch to think that it would spread to other areas of the highway system. And Springfield hasn't shown me much reason to disbelieve that fear.

I haven't seen offical budget numbers for the Illinois Toll Authority and the Illinois DOT (since they're two separate entities, and I'm not the governor), so I can't say for sure whether or not the Toll roads in IL would cost more or less to maintain if the Tollway authority was abolished. But I have a feeling that, after you got rid of the $20+/hr booth jobs, all of the administrative functions of the I-Pass program, the technology research and construction projects associated with the I-Pass program, and combined the administrative and maintenance functions of I-Toll and IDOT, it would probably be a zero-sum game.

While I agree with the idea of "if you use it, you pay for it", if the budget would be the same with or without I-Toll, then why bother your residents and visitors with tolls?

I mean, other than the need to perpetuate the bureaucracy of the Toll Authority, of course...

Posted by John Breen III at May 2, 2006 09:16 AM

Building the transponders into the car isn't a good idea. It is an in fact road tax, even for those who chose to use roads that are not service taxed.

Honestly, I think toll roads, ESPECIALLY in the case of illinois, specificaly chicago are actually interstate tariffs. If I use the NW, I pay 30 cents, in illinois, since 80 and 94 are join in a joint interstate of 80/94, the NW is cheap, until you get near wisconsin. The Skyway however, is EXHORBIDANT (spelling) crossing the hoosier border. The only people who use the skyway are hoosiers, or extremely lazy chicagoins. The tollway is a "hoosier commuter" tax, it is a regressive charge, it is a suburban tax, it is offensive to me. I refuse to use the skyway for just that reason.

And, the only reason I oppose the elimination of the penny, is that eventually, with economic growth, being attached to inflation, the penny is the first victim, it will be the nickle, then the dime, then the quarter and when it becomes the dollar, then we can just cut a zero off of our exchanges, which will hurt us for several years, just like when we bailed out mexico in the 90's, and they cut 2 zero's off of their exchanges.

Posted by wickedpinto at May 2, 2006 10:27 AM

So if we keep the penny then inflation won't happen and we won't be dropping zeroes? I think you are confusing cause and effect here. I agree with the penny naysayers. Nix the penny. It had a good run, but it's not worth keeping.

Posted by Karl Hallowell at May 2, 2006 11:19 AM

"It's not that people can't afford to pay the penny for the difference between $19.99 and $20.00, it's that there is a significant (and proven) psychological reason for such a pricing scheme." This is a feature, not a bug. It will ensure that the merchants will not round up when adjusting their pricing. That $19.99 item will far more likely be priced at $19.95 not $20.00 if you eliminate the penny.

Posted by Skeptic at May 2, 2006 01:48 PM

This is a feature, not a bug. It will ensure that the merchants will not round up when adjusting their pricing. That $19.99 item will far more likely be priced at $19.95 not $20.00 if you eliminate the penny.

Uhm... Except that you end up in the same situation as before. With anything other than a multiple of 5% sales tax, it doesn't matter if the price is 19.99, 19.98, 19.97, 19.95, 20.00, or 20.01. As soon as you add sales tax, you botch the whole thing up. And with local option sales taxes in many areas, you'll never see a set multiple of 5% sales tax across the country.

Perhaps the solution instead would be to build sales tax into the price on the shelf? It's already done with gasoline, and with most drinks at bars, why not price everything that way? Then retailers could round to the nearest nickel, and eliminate a lot of the confusion at the register (it still boggles my mind when I see people at the register short on change because they wouldn't calculate their purchase with sales tax).

It may mean price differences on the shelf between stores based on local tax rates, but the end result is still the same.

And you can still print the sales tax portion on people's receipts for those that are sales tax exempt or wish to claim their sales taxes paid out of state at the end of the year. The retailer would have to figure the sales tax up either way.

The solution still may be finding a more cost-effective metallurgy for minting pennies. We'll still have to figure prices down to the 1/100th of a dollar, so there shouldn't be a terribly pressing need to eliminate the ability to pay to that precision. Eliminating ha'pennies for pennies only changed the lowest denomination of the money system by a multiple of 2. It's a much different story trying to change that denomination by a multiple of 5...

Posted by John Breen III at May 2, 2006 02:45 PM

More cost-effective penny minting? Who cares?!

It would not matter to me if the penny were cheaper to mint for the government, it's pretty much worthless to me. Indeed, realistically I think the penny has negative value to me. I can't quite make myself just throw them away so I spend time looking after them, which almost certainly is not worth it considering their value.

I figure, if you, the consumer, want that precision, then don't pay with cash.

Posted by at May 2, 2006 04:46 PM

Pennies are like neutrinos. They are created by the sales tax transaction, then rarely participate in any future transactions. They will eventually constitute much of the "missing mass" of the universe.

Posted by lmg at May 2, 2006 06:12 PM

Aha!^2 I found more stuff you can still, barely, buy for a penny:

- a golf tee
- depending on the going rate, 1 (non-queen) bee
- someone's thoughts
- anything that is free
- a different penny
- 988 Zimbabwe dollars

So, uh, there's that...

Posted by Robin Goodfellow at May 3, 2006 02:50 AM

I thought of a few more:

- appx. 2.5 teaspoons of gasoline (87 octane)
- half a pound of Iron ore
- around 1/4 of an ounce of Lead
- 12 CDs from Columbia House

Posted by Robin Goodfellow at May 3, 2006 03:08 AM

Ultimately, the transponders should just be built into the cars and be usable anywhere in the country.

This is a good thing?

It's a step on the path to the goal of having the cars drive themselves. That could be a very good thing.

Posted by Paul Dietz at May 3, 2006 04:44 AM

"With anything other than a multiple of 5% sales tax, it doesn't matter if the price is 19.99, 19.98, 19.97, 19.95, 20.00, or 20.01." Okay, let's look at a current example. Last night, I bought a copy of Aeon Flux (the movie) at Best Buy. Shut up, it was on sale and I like Charlize Theron. Anyway, the DVD was marked at $9.99, and with 6% sales tax, the total came to $10.59. Now, here's the tricky part: 9.99 * 0.06 = 0.5994, BUT 10.59 - 9.99 = 0.60. Wow, look at that, they're already rounding a number to a certain precision.

You are correct about one thing; it doesn't matter what your price and tax are, you'll generally wind up with sub-penny decimals. Assume 5% tax:

19.95 * 0.05 = 0.9975
19.96 * 0.05 = 0.9980
20.00 * 0.05 = 1.0000

In all 3 cases, the sales tax is rounded to the same $1.00.

Posted by disconnect at May 3, 2006 06:37 AM

The ironic thing is that it might force us back to hard currency (as in gold or platinum).

I say Gold Pressed Latinum!! Posted by Michael Demmons at May 3, 2006 06:51 AM

Lmg wins. I've been wondering where all that "dark matter" was supposed to be and now I know: it's in my coin jar.

Posted by McGehee at May 3, 2006 08:50 AM

Anyway, the DVD was marked at $9.99, and with 6% sales tax,

Again, you're talking about either a dollar price or a tax rate that is a multiple of 5. If the price was instead $10.99 (+/- 5 cents), your tax would be $0.66. Not so good in a world without pennies.

Wow, look at that, they're already rounding a number to a certain precision.

I take your condescension and raise you another mathematical point: The last time I checked, not all prices were multiples of $5 and not all taxes were mulitples of 5%. In a world where they were, pennies would have little use at the register.

Posted by John Breen III at May 3, 2006 09:24 AM

It's a step on the path to the goal of having the cars drive themselves. That could be a very good thing.

It is a step to having the government able to monitor your activity at all times.
It is a step towards a new form of tax that, like most new taxes, doesn’t replace a pre-existing tax, but rather co-exists.
It is an opportunity to impose new laws and penalties to raise revenue rather than provide for public safety.

Which do you think will happen first? Mass use of self-driven vehicles, or increased regulatory taxes that impress upon drivers, particularly those who are poor, that use of mass transportation (which typically comes with chaffeurs for handling driving issue) is preferable to self-determined mobility.

Posted by Leland at May 3, 2006 10:16 AM

When can we just get tattoos on our foreheads?

Posted by Jaybird at May 3, 2006 11:22 AM

To all of those people who say that a penny doesn't mean that much in the grand scheme of things:

You have never been truly poor.

I have known people poor enough that those pennies really make a difference. And yes, that's a very sad thing. But for some people, a cashless society is impenetrable. The extra cent on the gallon means not being able to get to work. Or maybe, just maybe, the few cents' discount on the dozen eggs means dinner.

I'm not really arguing for or against abolishing the penny. I just wanted to point out that all the arguments I've seen here are based on a certain amount of privilege, and not on memories of ramen or peanut butter for meals.

Posted by B. Durbin at May 3, 2006 06:26 PM

I have eaten a lot of ramen and mac and cheese (peanut butter costs too much) over the years, and I say pennies are worthless.

The thing you don't seem to realize when you say that saving pennies really helps the poor, is that saving nickels is just as easy. And saving pennies actually helps keep you poor, by using your time in a futile pursuit and keeping your mind thinking in very small terms.

Imagine there were pennies littering a field, spaced far enough apart that you had to pick them up one at a time, but all you had to do was pick them up to "earn" them. If it took you an average of one second to pick up each one (not counting trips to the wheelbarrow or the bank) you'd be earning $36.00/hour. That isn't half of what I make now that I have an education.

The point is, if pennies were everywhere and free and you still couldn't make a middle class wage saving them, then saving them costs you time that could be better spent.

Lose the penny.

Posted by Steve at May 9, 2006 03:23 PM

Why not convert the penny into a nine tenths coin so we could have exact change for gas?

I'm surprised Wal-mart hasn't jumped on the nine tenths bandwagon. Then everything would "look" like it's a penny less.

Posted by C. Parker at May 11, 2006 11:24 AM

I agree with what Rand Simberg said in his may 1 post. Some stores that 'pride' themselves on being able to offer such low prices might not be able to do that so much anymore. And sales tax, to some degree would be effected. Take Ontario. Recently the ontario government lowered one tax from 8 to 7%. That means, over all for a purchase of say, $1.00, you'd be paying $1.14. If you rounded it to the nearest nikle, you would would be not saving anything and it would be like that tax had not been reduced at all. That, or the price would be lowered to $1.10 and it would be like the tax had been reduced by more then 1% (quite a bit more). My next point may sound a little weird. By eliminating pennies, people would be either spending more money (even if it is just a penny or 2). BUT it is also possible that store could lose a little money too. If for a store such as walmart, rounding something to the nearest nickle, prices ending in .97 would end up with the ending price numver being a 6, making the nearest nickle number lower. They would thus lose a penny per item. If each say walmart store had a minimum of 3 million customers a year, and canada has say 50 walmarts, that would mean they would lose $1500000. To some degree that is not a big deal, but that is a lot of money. The alternative here would be having a customer pay .04 cents more per item. It may not be a big deal to all customers, but they probably would notice the difference. I remember when Tim Hortons (I was working there at the time). I was asked many times if prices had been raised (which they had been). Some people did not like it, even though it was no more then 5 cents per item that had the price raised.
J

Posted by Jessica at July 19, 2006 10:28 AM

Posted by Jessica at July 19, 2006 10:39 AM

I was just reading some of the posts on eliminating cash. Where I live (Toronto), Tim Hortons (a coffee/ donut shop) only accepts cash or gift certificates. Eliminating cash might be a problem for them. Also, think about the jobs people do where they are paid in cash (I am thinking of mostly house keepers/ cleaning ladies/ men and babysitters, and especially babysitters old enough to babysit, but who might not have a bank account, or at least a card for it). I don't remember really having a debit card until I was like 17 or 18, and I had been babysitting for at least 2-3 years at that point.
J

Posted by Jessica at July 19, 2006 10:41 AM

how many dollars does 7.7 billion pennies equal to?

Posted by chery at September 7, 2006 02:55 PM

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