Friday, February 20, 2009

That Doesn't Make Cents...

Yes. Pennies.

Before 1982, a US Cent (commonly called a 'penny') was produced of an alloy containing 95% copper. In 1982, it was determined that the cost of the copper used to make the cent exceeded the face value of the coin (at times by double). Therefore, during that year, the composition of the cent was chanced to a zinc core, coated in a thin layer of copper. A metal of current cent is worth approximately 60% of the coin's face value.

Now, due to inflation, it costs the mint more to produce a cent than that cent is worth.

I think it's time for another change.
I think the cent is in its final days.

Think about it: who uses single cents?
Do you?

I propose we eliminate the one cent piece completely.

When I have mentioned this to people in the past, they usually respond with a question regarding change from the purchase of an item costing $0.99 or something similier. "What? Should all of our prices end in a 0 or a 5?"

They should all end in a 0.

I propose we also eliminate the 5 cent piece. When is that last time you bought an item for only 5 cents? When is the last time you based a purchasing decision based on a 5 cent difference? If I am thirsty, I will buy a drink regardless of whether it's $0.95 or $1.00.

If we drop the 1 and 5 cent pieces, we would simply drop the last decimal place. Rather than pricing down to the hundredths of a dollar, we simply price to the tenth. What was "a dollar and fifty cents" would become "a dollar and 5 tenths".

While I'm on the topic of our currency, why do we still use one dollar bills?
I believe we should fully utilize the dollar coin, and eliminate the one dollar bill.
Initially, it will produce more to mint a coin than to print a dollar bill. However, that coin can last over 50 years, while the lifespan of a dollar bill is a mere year and a half. That's over 3300%! The extra cost of minting the coin would be far out-weighed by the much smaller number needing to be produced.

The reason the dollar coin is not currently more popular, I've been told, is it's weight. Many people say they do not want to carry all that extra weight in the pockets, but I think most will find that, realistically, they don't carry that many single dollars at once. I doubt they would notice such a minor increase in weight. The most you would need to carry would be 4. After that, you could use a $5 bill.

Your thoughts?

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