It's time for the penny to go - Nubblies.net Forums

DJ FC · 12-24-2008, 10:42 AM

One of the first things I did in Chicago was visit an authentic American McDonald's. I bought some french fries, the bill came to $1.78 and I paid with 2 crisp $1 bills. My change came back to me in the form of 2 dimes... $.20. The mathematicians in the room will note that I was due $.22. I was robbed of $.02 and I didn't care about that at all.

When a store rounds up on your change and gives you say $.25 instead of $.24, that is one sign that the $.01 is of marginal value and in most cases may be a trivial, notional amount. But when a store rounds down on the change with no expectation whatsoever that the customer will complain, then you really know that the currency is worthless. Some customers may still complain, but the vast majority of customers will agree that $.22 and $.20 are "close enough". Indeed if there wasn't some semi-religeous psychological factors involved I'd probably think that $0 and $.22 were "close enough".

The fact is the penny is worthless. Before commodity prices dropped and the dollar had it's recent strength, the US govt. was paying as much as 1.75 cents to print a single penny. (And 7 cents to print a Nickel!). Many argue that the penny is such a strong candidate for being eliminated by arguing that even the Nickel should go!

The Penny Should Go, But What About the Nickel? - Economics Blog - Zubin Jelveh - Odd Numbers - Portfolio.com

When the half cent coin was eliminated in 1857, it was worth $.02 in today's money. So we have a coin which is worth half as much as the one they decided to give the boot.

Play around with this:

The Inflation Calculator

First: A rebuttal of the stupid argument which I'm sure would have been asked or given without my pre-emptive answer:

Q: But now all the stores will round up their prices and we'll get screwed!

A: Not really. Prices can still be in $.01 incriments (Indeed, Gas is sold in $.001 incriments many times), and the rounding will only happen at the final sale. A good which costs $.06 will still cost $.06 and you'll round as the last step.

Professor's research supports eliminating penny

Ugly Bastard · 12-24-2008, 01:42 PM

It's weird... like I care about this issue to an extent, but all of my care-points are split almost exactly 50-50. For the life of me, I cannot bring myself to make a call one way or another.

Pliedes · 12-24-2008, 02:15 PM

I think the concept of the penny is necessary. I think the penny itself is not.

Prices can be rounded up or down (that candy bar costs $.50 instead of $.49; or gas is $2.00 instead of $1.99&9/10), but the sales tax associated with them is varies heavily from place to place.

For instance, around here 'normal' sales tax is 6.5%, on vices like liquor its 9.5%, and in downtown Seattle its 7.5%. Each number has legit reasons for being exactly where it is and result in hundreds of millions of dollars which provide a whole array of services to the state. Those pennies add up. Also, think about Wall Street. Your stock goes up one-half-of-one percent....depending on the price of your stock, that could be a few pennies- it could be a lot of pennies....the whole market trades on small amounts that have large effects. I'm not saying your portfolio manager is actually going to send you a crate full of pennies, but the concept of 1/100 of $ is a pretty important thing.

I'd rather businesses were just smart enough to calculate tax into the price of an item. I'd love it if everything just had a dollar sign on it- but let's be honest, that's not gonna happen.

This all being said, I hate pennies, and wish they existed only on paper.

Mr. Blonde · 12-24-2008, 02:19 PM

DDTempest · 12-24-2008, 05:28 PM

Quote:

Originally Posted by Pliedes

I'd rather businesses were just smart enough to calculate tax into the price of an item. I'd love it if everything just had a dollar sign on it- but let's be honest, that's not gonna happen.

This works out great in theory but not so much in practice. Did you know that if you buy a candy bar with EBT (foodstamp card) it doesn't charge tax because it counts as food? If you buy it with regular money it is taxed because it counts as merchandise. This is just one example.

Not to mention that it would place a huge financial burden on merchants to calculate and update their prices on a per item basis. There are over 20,000 different items in a small store like Walgreens. Leaving sales tax as it is makes it a simple change one number in a database when sales tax changes.

Also most items are priced where they are for psychological effects. While the internet heroes here know that $9.99 is every bit of $10, people shopping still think of it as "under $10." $10.69 just doesn't have that same impact. Items live and die based on their ability to reach a certain "psychologically effective price point" Ever notice that 90% of As Seen on TV items are 19.99? There is a reason for that.

Mr. Blonde · 12-24-2008, 06:25 PM

Quote:

Originally Posted by Pliedes

I'd rather businesses were just smart enough to calculate tax into the price of an item. I'd love it if everything just had a dollar sign on it- but let's be honest, that's not gonna happen.

If I remember correctly it's like this in Australia.

GWB, aren't there countries where the penny is actually obsolete, both in pricing and (obviously following suit) physical presence? Most of you know why I posted the picture of Samir above. I guess i'm kinda split too, i'm not near as in touch with finances as someone such as GWB is, but the actual physical penny I feel is pretty worthless.

Another interesting note, how much longer do you guys think it is before nobody uses physical money anymore and everything goes to plastic? Anybody think there will be a universal monetary system in the future? "Credits"?

Pliedes · 12-24-2008, 06:44 PM

Quote:

Originally Posted by Mr. Blonde

Anybody think there will be a universal monetary system in the future? "Credits"?

How about "internets"?

Mr. Blonde · 12-24-2008, 06:53 PM

Novel idea. I'll pay you in internets.

SittinOnDubsWGW · 12-24-2008, 07:11 PM

Quote:

Originally Posted by Mr. Blonde

Another interesting note, how much longer do you guys think it is before nobody uses physical money anymore and everything goes to plastic? Anybody think there will be a universal monetary system in the future? "Credits"?

I don't see this happening, at least not anytime remotely soon. I rarely carry cash at all though. Only times I have cash on hand is if I'm going out in Mexico or if I'm gambling. I can't believe I used to always carry a minimum of a couple hundred bucks on me throughout college, particularly when poker was my sole source of income.

Ugly Bastard · 12-24-2008, 10:52 PM

It occurred to me just now: lose the penny, create a $500 bill. This would stimulate the economy as class-consciensious people work more and harder to acquire the new bill.

DJ FC · 12-24-2008, 11:53 PM

Gangstas are known to carry the €500 note as there currently is no form of currency with more "bang for the buck". If you need to stash large quantities of money in as small and lightweight way as possible the €500 note is the way to go... that's almost $750 in a single bill!

Old article: http://www.slate.com/id/2111504/

And yes, some of you are arguing that we shouldn't lose the concept of a penny. The trading example is spot on. Some products trade in ranges as tight as half, or even a tenth, of a basis point! A basis point is 1/100th of 1 percent (which is 1/100th of a given value). A tenth of a basis point would be 1/100,000th of a value. So we already trade in amounts way less than a penny and we don't need physical currency to do so. Get rid of the penny!

f3lix · 12-25-2008, 02:35 AM

I also prefer Australia's method of including tax in the price. You know what you're paying and don't have to add in tax (which can be different in the US from state to state.) Australia no longer uses the penny, it's lowest denomination is the nickel, yet their dollar isn't too far from ours.

vaga1220 * · 12-25-2008, 05:43 AM

Quote:

Originally Posted by Ugly Bastard

It occurred to me just now: lose the penny, create a $500 bill. This would stimulate the economy as class-consciensious people work more and harder to acquire the new bill.

Don't we already have a $500 bill? as well as a $1,000 and $10,000

Mr. Blonde · 12-25-2008, 08:33 AM

I'm pretty sure they took those out of circulation years ago.

DDTempest · 12-25-2008, 06:56 PM

Quote:

Originally Posted by Mr. Blonde

I'm pretty sure they took those out of circulation years ago.

Last I checked, $500 bills were worth about $600!

Pliedes · 12-26-2008, 09:25 PM

Quote:

Originally Posted by DDTempest

Last I checked, $500 bills were worth about $600!

So that $2 bill you gave me must be worth almost..... $2.40!!!!

Does that mean I've finally actualized the American dream?

DDTempest · 12-27-2008, 11:42 AM

$2 bills are still in circulation and still being printed. They are worth $2.

AcTivE · 12-29-2008, 06:45 AM

this one too

Large denominations of United States currency - Wikipedia, the free encyclopedia

Didn't think those were actually real..crazy stuff.

THEINCREDIBLEdork · 12-29-2008, 10:53 AM

interesting that most of them were issued in 1929

TwoBlackEyes · 01-08-2009, 02:14 PM

People still use cash? Really? Why?

DDTempest · 01-08-2009, 03:19 PM

Quote:

Originally Posted by TwoBlackEyes

People still use cash? Really? Why?

I use cash mainly in bar situations. There is nothing that pisses me off more than trying to get my tab closed out when I am trying to leave in a hurry. Also: hookers don't take plastic.

TwoBlackEyes · 01-08-2009, 03:29 PM

Quote:

Originally Posted by DDTempest

I use cash mainly in bar situations. There is nothing that pisses me off more than trying to get my tab closed out when I am trying to leave in a hurry. Also: hookers don't take plastic.

Good ones do. Ask the former Gov. of NY.

hfam95 · 01-08-2009, 04:22 PM

Quote:

Originally Posted by DDTempest

I use cash mainly in bar situations. There is nothing that pisses me off more than trying to get my tab closed out when I am trying to leave in a hurry. Also: hookers don't take plastic.

I'm sure they do at the places. Maybe Felix can make a trip to the moonlight bunny ranch and research it first hand.

f3lix · 01-12-2009, 04:00 PM

Bunny Ranch is expensive. They take plastic.

I still use cash for almost everything.

DJ FC · 01-12-2009, 04:37 PM

I use cash a lot more now than I did when I was in college.

I don't know how much people on nubblies bet with coworkers, but I bet with mine A LOT. Cash is king.

View Poll Results: Fuck the Penny?
FUCK THE PENNY	9	64.29%
I LOVE THE PENNY	1	7.14%
I JUST WANT TO SEE THE RESULTS	4	28.57%
Voters: 14. You may not vote on this poll

12-24-2008, 10:42 AM	#1 (permalink)
DJ FC MURICAN Join Date: Jul 2004 Location: Virginia Posts: 5,136 Internets: 250185	It's time for the penny to go One of the first things I did in Chicago was visit an authentic American McDonald's. I bought some french fries, the bill came to $1.78 and I paid with 2 crisp $1 bills. My change came back to me in the form of 2 dimes... $.20. The mathematicians in the room will note that I was due $.22. I was robbed of $.02 and I didn't care about that at all. When a store rounds up on your change and gives you say $.25 instead of $.24, that is one sign that the $.01 is of marginal value and in most cases may be a trivial, notional amount. But when a store rounds down on the change with no expectation whatsoever that the customer will complain, then you really know that the currency is worthless. Some customers may still complain, but the vast majority of customers will agree that $.22 and $.20 are "close enough". Indeed if there wasn't some semi-religeous psychological factors involved I'd probably think that $0 and $.22 were "close enough". The fact is the penny is worthless. Before commodity prices dropped and the dollar had it's recent strength, the US govt. was paying as much as 1.75 cents to print a single penny. (And 7 cents to print a Nickel!). Many argue that the penny is such a strong candidate for being eliminated by arguing that even the Nickel should go! The Penny Should Go, But What About the Nickel? - Economics Blog - Zubin Jelveh - Odd Numbers - Portfolio.com When the half cent coin was eliminated in 1857, it was worth $.02 in today's money. So we have a coin which is worth half as much as the one they decided to give the boot. Play around with this: The Inflation Calculator First: A rebuttal of the stupid argument which I'm sure would have been asked or given without my pre-emptive answer: Q: But now all the stores will round up their prices and we'll get screwed! A: Not really. Prices can still be in $.01 incriments (Indeed, Gas is sold in $.001 incriments many times), and the rounding will only happen at the final sale. A good which costs $.06 will still cost $.06 and you'll round as the last step. Professor's research supports eliminating penny
	The basis of our governments being the opinion of the people, the very first object should be to keep that right; and were it left to me to decide whether we should have a government without newspapers, or newspapers without a government, I should not hesitate a moment to prefer the latter. But I should mean that every man should receive those papers and be capable of reading them.

12-24-2008, 02:19 PM	#4 (permalink)
Mr. Blonde Spice Master Join Date: Jan 2004 Posts: 17,969 Internets: 278288
	Psychedelics are illegal not because a loving government is concerned that you may jump out of a third story window. Psychedelics are illegal because they dissolve opinion structures and culturally laid down models of behavior and information processing. ― Terence McKenna

12-24-2008, 06:53 PM	#8 (permalink)
Mr. Blonde Spice Master Join Date: Jan 2004 Posts: 17,969 Internets: 278288	Novel idea. I'll pay you in internets.
	Psychedelics are illegal not because a loving government is concerned that you may jump out of a third story window. Psychedelics are illegal because they dissolve opinion structures and culturally laid down models of behavior and information processing. ― Terence McKenna

12-24-2008, 11:53 PM	#11 (permalink)
DJ FC MURICAN Join Date: Jul 2004 Location: Virginia Posts: 5,136 Internets: 250185	Gangstas are known to carry the €500 note as there currently is no form of currency with more "bang for the buck". If you need to stash large quantities of money in as small and lightweight way as possible the €500 note is the way to go... that's almost $750 in a single bill! Old article: http://www.slate.com/id/2111504/ And yes, some of you are arguing that we shouldn't lose the concept of a penny. The trading example is spot on. Some products trade in ranges as tight as half, or even a tenth, of a basis point! A basis point is 1/100th of 1 percent (which is 1/100th of a given value). A tenth of a basis point would be 1/100,000th of a value. So we already trade in amounts way less than a penny and we don't need physical currency to do so. Get rid of the penny!
	The basis of our governments being the opinion of the people, the very first object should be to keep that right; and were it left to me to decide whether we should have a government without newspapers, or newspapers without a government, I should not hesitate a moment to prefer the latter. But I should mean that every man should receive those papers and be capable of reading them. Last edited by DJ FC; 12-25-2008 at 12:03 AM.

12-24-2008, 01:42 PM	#2 (permalink)
Ugly Bastard Senior Member Join Date: Feb 2002 Location: U.S.A. Posts: 13,643 Internets: 247330	It's weird... like I care about this issue to an extent, but all of my care-points are split almost exactly 50-50. For the life of me, I cannot bring myself to make a call one way or another.

12-24-2008, 02:15 PM	#3 (permalink)
Pliedes Senior Member Join Date: Oct 2002 Location: Puget Sound Posts: 4,594 Internets: 1608	I think the concept of the penny is necessary. I think the penny itself is not. Prices can be rounded up or down (that candy bar costs $.50 instead of $.49; or gas is $2.00 instead of $1.99&9/10), but the sales tax associated with them is varies heavily from place to place. For instance, around here 'normal' sales tax is 6.5%, on vices like liquor its 9.5%, and in downtown Seattle its 7.5%. Each number has legit reasons for being exactly where it is and result in hundreds of millions of dollars which provide a whole array of services to the state. Those pennies add up. Also, think about Wall Street. Your stock goes up one-half-of-one percent....depending on the price of your stock, that could be a few pennies- it could be a lot of pennies....the whole market trades on small amounts that have large effects. I'm not saying your portfolio manager is actually going to send you a crate full of pennies, but the concept of 1/100 of $ is a pretty important thing. I'd rather businesses were just smart enough to calculate tax into the price of an item. I'd love it if everything just had a dollar sign on it- but let's be honest, that's not gonna happen. This all being said, I hate pennies, and wish they existed only on paper.

12-24-2008, 10:52 PM	#10 (permalink)
Ugly Bastard Senior Member Join Date: Feb 2002 Location: U.S.A. Posts: 13,643 Internets: 247330	It occurred to me just now: lose the penny, create a $500 bill. This would stimulate the economy as class-consciensious people work more and harder to acquire the new bill.

12-25-2008, 02:35 AM	#12 (permalink)
f3lix Gangnam Style Join Date: Oct 2003 Location: DH's Massage Parlor Posts: 6,383 Internets: 213510	I also prefer Australia's method of including tax in the price. You know what you're paying and don't have to add in tax (which can be different in the US from state to state.) Australia no longer uses the penny, it's lowest denomination is the nickel, yet their dollar isn't too far from ours.

12-25-2008, 08:33 AM	#14 (permalink)
Mr. Blonde Spice Master Join Date: Jan 2004 Posts: 17,969 Internets: 278288	I'm pretty sure they took those out of circulation years ago.
	Psychedelics are illegal not because a loving government is concerned that you may jump out of a third story window. Psychedelics are illegal because they dissolve opinion structures and culturally laid down models of behavior and information processing. ― Terence McKenna

12-27-2008, 11:42 AM	#17 (permalink)
DDTempest Ahoy Fuckbag Join Date: Sep 2008 Location: In a pineapple under the sea Posts: 3,540 Internets: 187030	$2 bills are still in circulation and still being printed. They are worth $2.

12-29-2008, 06:45 AM	#18 (permalink)
AcTivE 1 thing leads to another. Join Date: Feb 2002 Posts: 2,012 Internets: -2654	this one too Large denominations of United States currency - Wikipedia, the free encyclopedia Didn't think those were actually real..crazy stuff.
	___________________ 3:o) horned creatures...wat wat ___________________ Last edited by AcTivE; 12-29-2008 at 06:46 AM.

12-29-2008, 10:53 AM	#19 (permalink)
THEINCREDIBLEdork Emperor Meow Join Date: Sep 2004 Posts: 9,316 Internets: 284585	interesting that most of them were issued in 1929
	#YOLO

01-08-2009, 02:14 PM	#20 (permalink)
TwoBlackEyes Been told twice Join Date: Jan 2009 Posts: 312 Internets: 1299	People still use cash? Really? Why?

01-12-2009, 04:00 PM	#24 (permalink)
f3lix Gangnam Style Join Date: Oct 2003 Location: DH's Massage Parlor Posts: 6,383 Internets: 213510	Bunny Ranch is expensive. They take plastic. I still use cash for almost everything.

01-12-2009, 04:37 PM	#25 (permalink)
DJ FC MURICAN Join Date: Jul 2004 Location: Virginia Posts: 5,136 Internets: 250185	I use cash a lot more now than I did when I was in college. I don't know how much people on nubblies bet with coworkers, but I bet with mine A LOT. Cash is king.
	The basis of our governments being the opinion of the people, the very first object should be to keep that right; and were it left to me to decide whether we should have a government without newspapers, or newspapers without a government, I should not hesitate a moment to prefer the latter. But I should mean that every man should receive those papers and be capable of reading them.

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