This has to be one of the dumbest props I've seen for a long time... well, at least for a little while.
"This proposition will pay out at POP$100 if the U.S. Government decides by Januray 1, 2009 to phases out the penny."
If you read the LA Times article at http://latimesblogs.latimes.com/washington/2008/05/coinpolitics.html
you'll see this bit:
"Notably opposing the bill was the U.S. Mint, which complained it doesn't give enough power to the Treasury to regulate coin composition and that the 270-day steel-penny window is unrealistically short. Mint Director Edmund Moy called the rest of the bill overly "prescriptive and limiting" in a letter to Congress this week."
This is the reaction to simply changing the composition of the penny. Care to think about what would be involved to ELIMINATE the penny?
For starters, when you went to the grocery store they'd have to "round out" your purchase price if you chose to pay in cash. Alternatively, they could price everything so the cost would be calculated with sales tax to be a 5 cent multiple. Or maybe stores can be forced to issue "credit certificates" for the odd-cent amount.
No matter what solution is suggested, it would push huge costs onto businesses that use hard currency. They would have to revamp their pricing systems, bookeeping systems, and would have to deal with large numbers of pissed-off customers.
It's only pennies, but the ramifications are huge. Ever see the movie "Office Space"? A couple guys come up with a program to harvest the fractions of pennies their company discards daily in its bookeeping... and end up with $350,000 very quickly. It isn't a farfetched scenario. With the millions of cash transactions that take place daily, eliminating whole pennies will amount to a national multi-billion dollar fiasco in just a year or two.
This is as short short short as you can get. The outcry by businesses against the cost they would have to bear in retooling their operations, and the outcry by consumer groups who would see the potential for abuse, would make any such move impossible.
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I'm with vulgarian on this one. A decimalized monetary system just doesn't work without some kind of 1 cent piece
I thought about gas prices. They also would go up in five cent increments (not like the don't already, I guess). But it's definitely a short.
On a side note, I think they should stop printing the dollar and replace it with a coin.
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Here in Boston the MBTA subway system sells its fare cards through machines that spit dollar coins out at you as change. I like the things as being more eco-friendly and durable than coins. they also kind of beef up the vacation fund because they end up in the change jar with everything else.
I could deal with losing the 1 dollar note.
I think something like what pieces of eight used to be may work better.
The Euro, and the Pound both have a coin worth 2 of them both. I found those very useful and would be pleased if the US would follow suit. Perhaps a $3 coin would be better the way the dollar is dropping in value!!!
y'all are putting too much logic and not enough selfish self-serving politics in. It's an election year, no one's gonna rock the boat.
Short
ejcassel
Well................. Getting rid of the penny would cost $$$ plus, the US mint has enough pennies to last until 2011, so this is stupid!
ejcassel has a point, nobody is going to try and change what the U.S monetary system is already, but as soon as the elections are over I can see some politicians waking up and saying "we're losing money with the penny...", then doing something about it.
While I'm definitely short on this (it won't happen this year), I do believe that we should ditch the penny. The argument against is that then we would have to round purchases to the nearest 5 cent. That is no problem. We already round sales taxes and gasoline purchases to the nearest cent and no-one complains. Rounding to the nearest 5 cent is no harder. There is no real need to recall pennies. Just stop production and let the market decide how to live without them.
I'm also a fan of stopping production of the dollar bill. The dollar coin is an adequate replacement and costs less in the long run (it lasts much longer than the bill).
BTW, what happened when they eliminated the half cent piece?
The last sentence of this spells January wrong...