My idea for US currency reform

[mgk920]

Bumping an old thread because apparently the president tweeted during the Super Bowl that he has ordered the Treasury to stop producing pennies because they cost more to make than they're worth.

...Can he actually do that by executive order?

Finally, a good fucking idea from this doofus.

You say that, but it makes no cents.

Nickels also cost more than 'face' value to make and distribute.  I would eliminate them, too, along with dimes.  All three are only useful for allowing the fine parsing of state and local sales taxes.  To accommodate that, have the states set their sales tax rate cards to round the tax for cash transaction up or down to the nearest 25¢ instead of the nearest 1¢.

Quarters are now just barely useful for any kind of legitimate commerce (one will buy a whole 15 minutes from a downtown Appleton, WI parking meter.

One complicating item here is that even through the Treasury Department is under the control of POTUS, coins (denominations, sizes, designs and compositions) are currently under the control of Congress.

< sigh . . . >



Mike

[Scott5114]

All three are only useful for allowing the fine parsing of state and local sales taxes.

Also paying out slot machine winnings. Nevada's a swing state. Just sayin'.

[mgk920]

All three are only useful for allowing the fine parsing of state and local sales taxes.

Also paying out slot machine winnings. Nevada's a swing state. Just sayin'.

Las Vegas, NV, slot machines still use coins?

Mike

[Scott5114]

Las Vegas, NV, slot machines still use coins?

No. The machine runs a credit balance, and when you hit the cash out button you get a voucher with whatever your balance on the machine was. Then you take that to a different machine (or a human cashier) to exchange it for cash.

The thing is, though, the vast majority of slot machines these days use 1¢ credits, since it's a lot easier for people to see 2000 credits as $20.00 (as opposed to, say, 80 credits = $20.00 on a quarter machine—the number of people who flipped out at me because they put a $20 in a quarter machine and "it only credited 80¢" was higher than you'd think). Which means that the payouts are in multiples of 1¢...so you get lots of vouchers at the cage with amounts like $16.74 and $9.89. Which requires pennies to pay out.

Rounding in this situation is a no go because that affects the casino's payout percentage (theoretically it should work out in the end, but nobody wants to risk it falling outside of the bounds of regulatory approval). I've seen a few casinos try and finesse this by asking patrons to donate the coins to a charity (often one related to problem gaming), with mixed results.

It will be interesting to see if the Nevada Gaming Commission makes any changes as a result of this.

[mgk920]

Las Vegas, NV, slot machines still use coins?

No. The machine runs a credit balance, and when you hit the cash out button you get a voucher with whatever your balance on the machine was. Then you take that to a different machine (or a human cashier) to exchange it for cash.

The thing is, though, the vast majority of slot machines these days use 1¢ credits, since it's a lot easier for people to see 2000 credits as $20.00 (as opposed to, say, 80 credits = $20.00 on a quarter machine—the number of people who flipped out at me because they put a $20 in a quarter machine and "it only credited 80¢" was higher than you'd think). Which means that the payouts are in multiples of 1¢...so you get lots of vouchers at the cage with amounts like $16.74 and $9.89. Which requires pennies to pay out.

Rounding in this situation is a no go because that affects the casino's payout percentage (theoretically it should work out in the end, but nobody wants to risk it falling outside of the bounds of regulatory approval). I've seen a few casinos try and finesse this by asking patrons to donate the coins to a charity (often one related to problem gaming), with mixed results.

It will be interesting to see if the Nevada Gaming Commission makes any changes as a result of this.

Round the bash settlements *UP or DOWN* to the nearest quarter, the 'breakage' error will total out to zero over time.  'Plastic' settlements would be unaffected.

Do Japanese casinos pay out in yen and sen?

Mike

[Scott5114]

Round the bash settlements *UP or DOWN* to the nearest quarter, the 'breakage' error will total out to zero over time.

Yes, but if the Gaming Control Board happens to audit you and your hold percentage is out of balance because the error has so far been in the house's favor and it hasn't evened out yet, are they going to accept "that's just rounding error" as an answer? Until they say that's fine, I wouldn't want to risk being the first property to find out...

Do Japanese casinos pay out in yen and sen?

Japanese casinos, I shit you not, pay out in stuffed animals. Or cigarettes. Or other such trinkets.

Then there happens to be a store next door, operated by totally different people, that just so happens to buy stuffed animals or cigarettes or trinkets.

[1995hoo]

Bumping an old thread because apparently the president tweeted during the Super Bowl that he has ordered the Treasury to stop producing pennies because they cost more to make than they're worth.

...Can he actually do that by executive order?

EDIT: One of the lawyers can correct me here if I'm wrong, but it seems like he can—31 U.S. Code § 5112 states that while the Mint may make pennies, it doesn't seem to require them to.

While I have not researched the question, I think you're probably right based on a practical consideration: For some time now, the Mint has not produced From 2002 through 2020, the Mint did not produce half dollars for standard circulation (as opposed to for proof sets or the like), and from 1982 to 1998 the Mint did not produce dollar coins after the Susan B. Anthony coin flopped (they produced some of those again in 1999 when the USPS needed them for vending machines and the Sacagawea coins weren't going to be ready). During all that time, the Mint had the authority to make the Anthony dollars but simply chose not to because they weren't needed. Based on those two practical decisions not to make coins they're allowed to make, I assume the president can order the Mint not to produce pennies.

(Small factual edit based on my own faulty memory. New text is underlined, old text is struck out. Doesn't change my conclusion.)

[SEWIGuy]

I am all for getting rid of the penny, and for every transaction to be rounded to the nearest nickel, but not because they cost more to produce than their value. That is an illogical reasoning.

Over their lifetime, a coin is going to be used in hundreds of transactions. The value of those transactions will greatly exceed the cost to mint the coin.

Anyway, the only way a dollar coin succeeds is if they stop printing dollar bills. I'm all for that too.

[kkt]

I'd favor dropping the 1 and 5 cent coins and introducing $1 and $2 coins.  And dropping or greatly restricting printing new $1 and $2 bills.

[1995hoo]

Another thought on the coinage issue: Some people are screaming and yelling that the president has no authority to do this (I think they're wrong). But who would have standing to bring a lawsuit challenging it?

[SectorZ]

I went on a penny rant last night to my wife two hours before Pres. Trump announced his plans. I had just been reading about how Australia got rid of their one-cent coins over 30 years ago.

I'd like to round all transactions to the nearest 10 cents.

Get rid of the penny and the nickel, and convert the quarter to a half dollar, so we only have dimes and half dollars. I like the idea of a dollar coin too, but, well, cost.

[Rothman]

Keep the penny and bring back the half cent.

[formulanone]

I don't see the dollar coin making much of an impact here, mainly because it hasn't been a consistent part of our commerce habits for almost a century. It seems to hold some meaning as a commemorative piece, but little else. Frankly, we could just get by on the 5 and 25 cent coins, and abolish the rest except for collectors; we also wouldn't have to reconfigure millions of registers and vending machines. Even then, most proof and uncirculated sets in the last few decades have had limited collector's appeal, mostly stagnant resale values for the clad sets, so the demand isn't what it used to be.

I think more people are loathe to carry coins as the years go by; our society tends to value smaller and lighter objects in our "everyday carry". That's why so many people want to remove the one cent piece / penny in the first place. Substituting it for dollar coins when the fifty cent piece has been effectively out of sight for two generations seems like another foolish waste. Paper currency has a shorter lifespan but folds up easier...yeah, they both tend to get lost. Sure, carrying a few $5 pieces might be easy for a trip to the store, but then you get your change back and you're back to an undesirable amount of coinage as change.

[JayhawkCO]

Do Japanese casinos pay out in yen and sen?

Japanese casinos, I shit you not, pay out in stuffed animals. Or cigarettes. Or other such trinkets.

Then there happens to be a store next door, operated by totally different people, that just so happens to buy stuffed animals or cigarettes or trinkets.

This is reminiscent of, when in developing countries, if the seller doesn't have the smallest change available, often you get a candy or a loosie in its stead.

[GaryV]

Can he actually do that by executive order?

He's done a whole lot of things by executive order. So he'll try, and then rant when some judge tells him he can't do it.

One complicating item here is that even through the Treasury Department is under the control of POTUS, coins (denominations, sizes, designs and compositions) are currently under the control of Congress.

Again, this guy will simply do what he wants and wait until a court overturns him.

Sorry if that's too political.

[1995hoo]

The thing that would probably require Congress to get involved would be if there were going to be a rule about rounding transactions to the nearest nickel. On the other hand, nothing prevents businesses from just adjusting their prices—you don't need an act of Congress to charge an even $20.00 instead of $19.99 or whatever.

Apparently the Treasury says it costs 3.7¢ to produce one penny. I saw a statistic saying that in 2024 they minted 3,225,200,000 pennies. That works out to an expense of $119,332,400. Hardly chump change, though perhaps a rounding error when it comes to the federal budget.

[GaryV]

you don't need an act of Congress to charge an even $20.00 instead of $19.99 or whatever.

But depending on the tax it will screw up the system (6% in my area - so it would be $21.19 or $21.20). And the more items you buy, the more likely that the tax will come out to a non-even number of cents.

[1995hoo]

you don't need an act of Congress to charge an even $20.00 instead of $19.99 or whatever.

But depending on the tax it will screw up the system (6% in my area - so it would be $21.19 or $21.20). And the more items you buy, the more likely that the tax will come out to a non-even number of cents.

Good point. I didn't think about that. Perhaps the better way to do it would be to stop quoting prices pre-tax. Do it like at most sports venue concession stands where the price you see includes the tax. Figure a way that the price plus the tax comes out to a multiple of five cents.

Interestingly, CNN reports that it costs 13.8¢ to mint one nickel because of the alloy used—75% copper and 25% nickel (pennies are 97% zinc). In 2023, the Mint produced 1,427,500,000 nickels. That works out to a cost of $196,995,000 to produce coins worth $71,375,000. That's kind of striking.

[vdeane]

How much do you want to bet that all the people who were screaming that you can't get rid of the penny because they don't want to be forced to pay more on cash transactions that would round up (never mind that we've been rounding mills since forever, even with credit cards) will now forget they ever said that and claim that this is a great way to reduce spending and improve efficiency?

Japanese casinos, I shit you not, pay out in stuffed animals. Or cigarettes. Or other such trinkets.

Then there happens to be a store next door, operated by totally different people, that just so happens to buy stuffed animals or cigarettes or trinkets.

Reminds me of the "laundromat" in Young Sheldon.  I guess Connie's problem was doing the prize and the buy-back at the same place.

[Life in Paradise]

you don't need an act of Congress to charge an even $20.00 instead of $19.99 or whatever.

But depending on the tax it will screw up the system (6% in my area - so it would be $21.19 or $21.20). And the more items you buy, the more likely that the tax will come out to a non-even number of cents.

Good point. I didn't think about that. Perhaps the better way to do it would be to stop quoting prices pre-tax. Do it like at most sports venue concession stands where the price you see includes the tax. Figure a way that the price plus the tax comes out to a multiple of five cents.

Interestingly, CNN reports that it costs 13.8¢ to mint one nickel because of the alloy used—75% copper and 25% nickel (pennies are 97% zinc). In 2023, the Mint produced 1,427,500,000 nickels. That works out to a cost of $196,995,000 to produce coins worth $71,375,000. That's kind of striking.

I would cut the penny and nickel as well as the dollar and two dollar bill (if they are still actively printing the latter).  Would increase the pressing of half dollars, dollar coins (as a paper bill replacement) and introduce two dollar coins.  Those coins would last a whole lot longer than paper, and these days you almost need to have $5, $10, and $20 rather than $1 to make an actual purchase for something, other than small stuff and tips.  So you really wouldn't have to put many of those coins in your pocket.

[1995hoo]

I was reading more news stories about the coinage while eating lunch. Using the figures of 3.7¢ to make one penny and 13.8¢ to make one nickel, in 2023 the US government lost almost a quarter of a billion dollars ($247,735,600) making those two types of coins.

I think the main use I have for $1 bills these days is tipping at the barbershop. I always carry $5s when I travel to use when tipping hotel housekeeping and the attendants in the first-class car on the Acela.

[mgk920]

I was reading more news stories about the coinage while eating lunch. Using the figures of 3.7¢ to make one penny and 13.8¢ to make one nickel, in 2023 the US government lost almost a quarter of a billion dollars ($247,735,600) making those two types of coins.

I think the main use I have for $1 bills these days is tipping at the barbershop. I always carry $5s when I travel to use when tipping hotel housekeeping and the attendants in the first-class car on the Acela.

I don't keep anything below $10 in my wallet anymore "too much bulk, not enough buying power".  I would also love to have higher value coins ($1, $2 at least) for my regular trips to the coin laundry (a great place to get your money cleaned!).  Pumping nearly a half roll of quarters, one at a time, into a washing machine to do one load is VERY BEYOND ANNOYING!  I also never run anything that would need a $5 coin, but other customers do.

Mike

Mike

[hbelkins]

I'm not in favor of totally scrapping the penny as a unit of coinage, but I see nothing wrong with putting a halt to minting of new pennies temporarily (or even indefinitely). There are plenty of pennies in circulation, and probably a lot more being hoarded that could be put back into circulation.

[Rothman]

People still need coins for laundry machines?

[mgk920]

People still need coins for laundry machines?

I a in zero mood to enrich the credit card companies!

Mike