Our monetary system is a mockery of value.
A common argument I hear against eliminating the penny is that it will cause additional inflation because stores will price their items in such a way so as to benefit from the round up.
First of all, that is stupid. Psychological pricing isn't going to go away with the loss of the cent. If anything, you'll get a better deal. Do you honestly think $19.99 is going to suddenly become $20 after the cent has been eliminated or do you think it will be much more likely to see a price of $19.95?
Remember, $19.99 is twenty bucks. So is $19.95. It just doesn't look like twenty bucks because our brains, for all their marvel of evolutionary engineering, are easy to fool. No retailer wants you to think you're spending twenty bucks. They want to exploit that part of your brain that only sees the 19 and assumes the product/service is only nineteen bucks because the vast majority of people can't be bothered to think that thought through after reading the entire price.
So no, prices are not going to go up because the penny is lost to our monetary system.
Second of all, in terms of buying power, the cent has effectively none. It is the neutrino of our monetary system. There is no sense in keeping a denomination around if nothing can be bought with even ten of them.
I work for a supermarket. Supermarkets sells tons of shit daily. When tabulated, the average cost of an item purchased in a supermarket (out of the literally tens of thousands of items sold in a day) varies between $2.25 and $2.50. The average transaction value varies between $18 and $22.
Yes, there are cheap items like Ramen dehydrated soup bricks (20¢ on sale) and cans of corn (49¢), but there are no items anymore which are priced for a dime or less.
And be reasonable, if someone bought a single can of corn and paid for it using forty-nine pennies, you'd very likely be more than a bit annoyed. On the business end, they'd notice the time being spent counting the cents to verify there are in fact forty-nine and realize they'd lost money on that transaction.
It would take nearly five rolls of cents to purchase an average item. Is that really a reasonable medium for exchange?
Using the "ten coin metric", even nickels and dimes ought to be eliminated. It's hard enough to get people to accept the loss of the cent, could you imagine expanding this argument to include nickels and dimes as well?
You'd also get the same argument listed above with regards to pricing which again, would be stupid.
Again, do you really think the cut-throat business of selling shit to people they don't need is really gonna round up all their prices to stick it to the consumer or do you think it far more likely that product sizes will adjust to reflect the new pricing paradigm?
It's not like cents, nickels, and dimes would disappear overnight. Production would cease and I'm sure some grace period would exist before the Federal Reserve would make a concerted effort to pull the coins from circulation. In that time, orange juice would likely return to their original half-gallon size (instead of those fucking annoying 59 fl.oz. "easy pour" containers they have now), Hershey bars would either increase or decrease slightly in size (we sell ours for 79¢ each so really, it could go either way) though I'd say increase because nothing grabs the consumer's attention like "NOW 30% LARGER!"), ice-cream should return to its original half-gallon size (from its presently aggravating 1½ quarts), etc.
The point is, products will adjust to reflect a quarter-dollar world. They have to. Do you think if Hershey tries fucking with consumers that Nestlé won't come right in with their "BIGGER BAR, SAME COST AS HERSHEY" gimmick? Do you think Minute Maid wouldn't do the same to Tropicana? Kellogg brands to General Mills?
Gas stations wouldn't matter all that much seeing as how the attendants (or you, if you're not from Oregon or New Jersey) pump the handle until the final cost evens out. Cents would continue to exist as fictive values when calculating per unit costs much like mils do now even though there has never been a mil coin issued by the U.S. government.
Speaking of mils (one tenth of a cent), our cent has less value today than a mil had in 1913. 1913 is the start of inflation record-keeping. The cent back then was worth about 23¢ today. That means a mil coin, had it existed, would have had 2.3¢ of purchasing power - more than twice what our lowly cent has today. Why again do we have cents? Or nickels and dimes for that matter? People seemed to get along just fine with their smallest coin having the approximate purchasing power of a quarter-dollar today.
As for sales taxes...fuck 'em. Regressive taxation is always a shitty idea. Let the elimination of the cent, nickel, and dime force the issue and eliminate that tax once and for all. Either that, have stores pay a sales tax from their total sales and incorporate that tax into their pricing structure like it should've been all along because seriously, it breaks my heart every time I have to introduce some kid who just wants a candy bar to the concept of sales taxation.
He gives me a dollar for a 99¢ item only to hear me tell him it's actually $1.06. He doesn't understand. Why should he? And why isn't the price on the shelf $1.06 since the only way out of that tax is through using foodstamps and most people (for now) don't have foodstamps? So stupid, but I digress...
Of course, it doesn't end with the elimination of the cent, nickel, and dime. On the other side, paper money is outdated too in terms of purchasing power. The $1, $2, $5, and $10 bills need to be eliminated too and replaced with coins.
"What, why?" you say. Coins are supposed to have purchasing power. They're not supposed to be a non-interest bearing metallic savings account that you cash in at a CoinSTAR or bank for folding money. You're supposed to be able to BUY things with coins like your parents and grandparents used to do. Just as our coinage system has fallen way behind, so has our currency.
By allowing our coins to become so devalued without decommissioning them, it's created a perception (that has lasted my entire 35 year lifetime) that change is for jars, not for spending (with the exception of quarters).
Even as a young kid, I intuitively knew that only quarters were worth having. Dimes were okay, but a couple of quarters could definitely get you things like hamburgers at Burger King (35¢), Hershey bars (29¢), trading cards (49¢ for a pack of Garbage Pail Kids cards), etc. I remember a bunch of things you could still buy for less than a dollar then and turnstile coin-op vending machines took nickels (up until like 1983), dimes (up until like 1993), and quarters.
When my grandparents were young, finding a quarter on the ground meant they could buy a bagel with some juice for two (10¢ each - the paper the man in the link is reading is a World War II headline) and still have enough left over to buy a Hershey bar (5¢) to share.
When my parents were young, finding a quarter on the ground meant you could buy a bottle of Coca-Cola, a small bag of chips, and a Hershey bar.
When I was young, finding a quarter meant I could play one video game at an arcade or I could get a really large gumball from a vending machine...maybe a small bag of chips.
I honestly don't think, aside from a Ramen soup, there's anything you can buy with a quarter today. Even arcade games, where you can find them, take two quarters (at least) to play one game. And yet we still have dimes, nickels, and cents...
Anyways, if the quarter is the penny of our day then the $20 is the dollar. What do I base this on? ATMs. ATMs make consumers withdraw money in $20 increments suggesting that the $20 is the basis of currency economy and not the one dollar bill. Therefore, eliminate all the lower denominations and replace them with coins...coins which will actually have purchasing power...coins which would be exceedingly costly to hoard in jars...coins which will actually circulate.
I've already seen vending machines that accept $5 bills. Is it really so unreasonable to think that we ought to be instead using $5 coins?
We already have a dollar coin. Adding a $2, $5, and $10 coin to that mix will only make things sensible.
As for such coins being "too heavy" for one's pockets. Again, I point out that such coins would be too valuable to accumulate in that fashion. The reason your change weighs you down today is because it's worth neither your time nor effort to count it out when making purchases. Your own lazy brain is constantly telling you that your coins are worthless.
However, if a pocketful of your coins were suddenly worth a few tens of dollars, you'll pick them out and spend them. Right now a random handful of change is usually worth less than 50¢. Only quarters are sort of worth the effort and even then you might not bother unless you knew quarters were the only coin you were carrying.
You're not going to carry around dozens of five and ten dollar coins. You're gonna spend them well before they reach that point. It'd be too expensive not to.
As for charities which usually come to the defense of cents, would you rather get a couple of pennies from consumers or have them donate a quarter or two? People would have quarter jars instead of penny jars because that's basically what they are now. Charities will do just fine. I really don't think people couldn't be bothered parting with a quarter to help the March of Dimes or the Salvation Army.
And if you're going to consider charity, think of the homeless as I advocate for the elimination of the cent, nickel, and dime. Right now, change is worthless except in aggregate. Wouldn't it be better for the homeless to receive quarters, half-dollars, and even the occasional dollar coin instead of pennies, nickels, and dimes they really can't do anything with? Those coins are almost like not giving at all.
And street performers. Wouldn't they benefit too from having the smallest coin they receive be the quarter-dollar?
If our ancestors felt they could get by with their smallest coin having the purchasing power of a quarter, then so can we.
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