Obama Pushes For Cheaper Pennies 825
Hugh Pickens writes "Time Magazine reports that hidden deep inside in the White House's $3.8 trillion, 2,000-page budget that was sent to Congress this week is a proposal to make pennies and nickels cheaper to produce. Why? Because it currently costs the federal government 2.4 cents to make a penny and 11.2 cents for every nickel. If passed, the budget would allow the Treasury Department to 'change the composition of coins to more cost-effective materials' resulting in changes that could save more than $100 million a year. Since 1982, our copper-looking pennies have been merely coppery. In the 1970s, the price of copper soared, so President Nixon proposed changing the penny's composition to a cheaper aluminum. Today, only 2.5% of a penny is copper (which makes up the coin's coating) while 97.5% is zinc. The mint did make steel pennies for one year — in 1943 — when copper was needed for the war effort and steel might be a cheaper alternative this time. What about the bill introduced in 2006 that the US abandon pennies altogether.? At the time, fifty-five percent of respondents considered the penny useful compared to 43 percent who agreed it should be eliminated. More telling, 76 percent of respondents said they would pick up a penny if they saw it on the ground."
what's wrong with rounding (Score:5, Informative)
In most Euro-countries, prices are rounded to the nearest 5-cent number, 1- and 2-cent coins are quite rare. Why even bother producing coins that are worth more as a material than as a coin?
In Denmark (Score:5, Informative)
.. we got rid of the 25 øre in 2008. So now the lowest denomination is 50 øre (around 9 cents). Swedens lowest coin is 1 krone (around 15 cents).
We've been rounding since 1972, and it omes very natural.
We did it in Holland (Score:5, Informative)
The Dutch Guilder (Gulden) had its cent removed years ago and when the Euro was introduced it wasn't long before it was agreed the Euro cent would no longer be used either. The latter is a bit more of a hassle since other countries haven't joined but in Holland it works pretty well.
Prices are till in cents but the deal is that if you pay in cash, it is rounded off. On the whole it balances out although if you are REALLY cheap, you pay eletronically when the rounding is in the shops favor and cash when it is in your favor. Items that you tend to buy on their own are already at a 5 center round off. So a cola would cost 95 instead of 99 cents.
It just makes sense, inflation makes prices go up but currency stays the same. So why keep amounts around that just don't make sense anymore? When the euro cent was briefly used everyone here quickly saw how fucking annoying they were, you soon ended up with a huge pile of worthless coins. You have to go pretty far back in time to remember being able to buy anything for a cent. I can barely remember being able to buy a single piece of gum for a nickle. Yes, that meant if you saved up 5 cents you had a piece of gum... but those days are gone. Move on.
It will be intresting to read the reactions on this subject from Americans. Americans are after all paying for these expensive pennies with their taxes and if there is anything an American hates it is paying taxes. So, what excuses will those people come up with to keep cent/penny around? Nostalgia?
In a way this shows the failure of democracy. This kind of move should be left to wise men, not people who feel nostalgic for a by gone era when you got a shiny penny from your granddad to buy candy. Maybe if democracy wasn't secret, then those 55% could be made to pay for the costs of making the pennies directly out of their own pocket. Wonder how many would still be nostalgic then?
Re:Monetary insanity (Score:5, Informative)
That's only a valid point if the currency isn't a fiat currency.
A cent isn't worth a cent because of the copper content...
Re:You can't eliminate them (Score:5, Informative)
In other countries this is solved by laws demanding that all prices advertised to individuals (as opposed to companies) or where the target customer is clearly an individual include sales tax. So prices including the sales tax are conveniently set to nice round numbers.
Historical precedent (Score:3, Informative)
Re:You can't eliminate them (Score:2, Informative)
The 1 or 2 eurocents here in Portugal works just fine...
Re:On the subject (Score:4, Informative)
It's been done before here in the US (Score:4, Informative)
But, since this process makes sense, it probably won't happen. This IS America, after all. We have a reputation to maintain.
Re:You can't eliminate them (Score:4, Informative)
In Europe we've all but done away with the 1 and 2 eurocent coins - their monetary value vs cost involved in handling them just didn't make sense.
Clearly, you have no clue how things work in Europe. Please talk about what you know - namely your country - but do not try to expand your knowledge by thinking all European countries work the same. They don't.
Re:PLASTIC (Score:5, Informative)
I hear Canada is moving to the polymer banknotes too. Having lived in both Australia and the US, I can say the polymer bills really are superior in every way. Can't tear em (seriously, try to - you will fail, unless you actually use scissors or something to get it started), goes through the wash without a problem, much harder to fake. The polymer notes were invented in Australia but now a lot of countries are using them.
Not to mention the fact that in all the polymer-note-using countries, the bills are different colors and sizes for each denomination (which has nothing to do with them being polymer admittedly). US currency is really irritating - you look in your wallet and see a ream of greenish paper (well, linen), side on, all the same size. You have no way of telling how much money you have without pulling it out, flicking through it, and looking at the demoninations. In Australia though and because they are different sizes and colors you can peek in your wallet and with a quick glance say "Ah yes, two yellows, an orange and a blue - I have $130". (Two 50s, a 20 and a 10)
Re:The problem with actual value of theoretical mo (Score:4, Informative)
Your memory is incorrect. I am sick of false fantasies of incredibly low gas prices in history. It never happened. There is this thing called inflation. Gas was not "almost free" in the 1970s. Adjusted to 2004 dollars, it varied between $1.73 and $2.28. The lowest adjusted price for gas EVER was $1.22 in 1998. That compares to the best adjusted price in the 1930s - $2.15 in 1931 - and the best adjusted price in the 1950s - $2.00 in 1952. In 2004 it had only risen to $1.89 from the 1998 low.
OK, the chart stops in 2004, and the current adjusted value is probably around $3.90, but somehow I don't think twice the price is the difference between $2 and $3.90 is "nearly free" compared to agonizingly high.
Ref: Historical Gas Prices, 1919–2004 [energy.gov]
Re:You can't eliminate them (Score:5, Informative)
Sigh.
Article 1, Section 8 of the constitution: Congress has the power to coin money, regulate the value thereof, etc. FEDERAL.
Article 1, Section 8 also contains the Commerce Clause, by which basis the FEDERAL government enacted (15 USC 45, and FTC regulations associated) laws and protections for consumers against false and misleading advertising.
It would be trivial, and WHOLLY within the power of the Congress, to pass a law requiring that advertisements show the TRUE price of an item with associated taxes rather than the misleading pre-tax value.
Maybe you should learn more about your country and government, rather than relying on the lies and misrepresentations that you're getting from Tea Retard pamphlets?
Re:You can't eliminate them (Score:5, Informative)
While this sounds nice and neat, this isn't actually constitutional. The document permits the national government to provide incentives for states to implement federal policy but it can't compel them to give up their power to implement sales taxes where permitted by state constitutions.
Why rounding up to a nickel may SUCK. (Score:4, Informative)
A number of people outside of the United States have been mentioning that their countries got rid of their equivalent of the penny years ago.......and the world didn't come to an end.
Still......
I remember a number of years ago, there was a true story about a programmer who wrote some kind of banking software. He did something such that he got a fraction of a penny on every transaction that went through the bank, deposited into a secret account.
After a few years he was quite wealthy and the only reason he got caught was he couldn't suppress his desire to brag.
Lesson learned: even little amounts add up.
How would people feel if they were told that because of rounding up to a nickle, they could have had an extra $100, $10 etc at the end of the year, 5 years, etc?
How would they feel knowing that they made a "donation" to corporate America of several thousand dollars over the course of their life time, for which those companies gave them *nothing*?
Re:You can't eliminate them (Score:5, Informative)
I don't disagree with you, but companies pitch a fit over it.
There's actually a very comparable situation going on right now. Recently an FCC rule took effect that required airlines to include taxes and fees in the airfare they list. Now Spirit Airlines runs a huge banner at the top of their pages that says: "WARNING: New government regulations require us to HIDE taxes in your fares." And believe me, Slashdot does not permit enough HTML to make it as obnoxious as they do!
In some ways they have a point. At least when you order a $1 item and end up paying $1.08 you know to be mad at the government about that 8 cents. In other ways you have a point. I want to know how much something actually costs, not how much it should cost in some mythical tax-free situation. That's especially true of something like airfare, where that extra amount could easily be over $100. Spirit is a low-cost carrier, but for example last time I visited friends in Australia (3 years ago I believe) the airfare was around $2200 -- the taxes and fees brought it up something over $2400 if I remember right. That's a significant difference and certainly something that needs to be budgeted for. Knowing that in advance is helpful since it's not like I can opt not to pay those taxes and fees.
Of course the simple compromise is to show the actual costs including taxes and fees and then require that it be broken down somewhere else: On your receipt, confirmation email, before you type in your payment information -- whatever suits the particular situation. But compromise is a dirty word in American culture these days, so it will all depend on which faction can steamroll the other into doing it their way.
Re:You can't eliminate them (Score:5, Informative)
I'm sure it's simple, so please enlighten me. If I order powdered vitamin water packets, and I have them delivered to my work address in Chicago, but I'm ordering from my house in Oakbrook, DuPage county, please tell me the tax that should get applied since it's simple.
Please remember: .5%
Illinois base Sales Tax is 6.25%.
Dupage County Sales Tax is 1%.
Oakbrook Sales tax is
Cook County Sales tax is 2%.
The Chicago Municipal Tax is 1.5%.
The use tax in Chicago is 1% for anything bought from a retailer.
There is a 2.25% tax applied to drugs and groceries in Chicago.
There is an additional 3% tax on soft drinks.
There is a 1% tax on prepared foods and beverages.
Is Amazon a retailer? Do they need to apply the 1% use tax?
Is powdered vitamin water considered a prepared beverage? Or is it a soft drink? Does the grocery tax apply? Or all of the above?
Does the sales tax get applied to my shipping address, my residence address, or my ordering address? What if I have the package is rerouted, or if I pick the package up at the local UPS depot which is in a different city or a different county? Does UPS then charge me the difference in sales tax?
And sadly, this is a simplified example. I didn't even get into whether I shipped it to a specific district in the city of Chicago which can/often does have different sales taxes, and I haven't tried to outline all the Oakbrook specific exceptions.
Re:You can't eliminate them (Score:5, Informative)
I've never received poor service in Europe. I receive different service due to cultural differences- they don't try to turn tables as fast as possible, they wait until asked to bring a check- because the other way is considered rude to them. But the quality of service I receive is on par with what I get in the US, without tip. If I could trade our system for theirs I would in a heartbeat.
Re:You can't eliminate them (Score:4, Informative)
The other thing is, that I haven't seen any *broad* advertising like TV ads, billboards, etc... with *prices* for specific products here in Europe (Germany) for ages. I vaguely remember some from the TV in the 70s or so, but not in the last few decades. (Special offers for special car editions being one exception that just came to mind.)
The only regular advertisement with prices is the weekly flyers from specific stores that clog up the mail box, and then of course the signs in the actual store or shop.
Re:You can't eliminate them (Score:4, Informative)
Please remember: .5%
Illinois base Sales Tax is 6.25%.
Dupage County Sales Tax is 1%.
Oakbrook Sales tax is
Cook County Sales tax is 2%.
The Chicago Municipal Tax is 1.5%.
The use tax in Chicago is 1% for anything bought from a retailer.
There is a 2.25% tax applied to drugs and groceries in Chicago.
There is an additional 3% tax on soft drinks.
There is a 1% tax on prepared foods and beverages.
Is Amazon a retailer? Do they need to apply the 1% use tax?
O_O
WTF?
That's crazy. We have a 10% GST that it's required to be included in the sale price of an item. If we want something to sell for $9.99, then the actual ex-GST price of the item is $9.08.
That is all.