Talk Elections

Sponsor: JBrase

I see this as a good thing. It saves us money, and people rarely use pennies anyway.

Will business make sure to price their products so that when customers have to pay, and taxes are accounted for, it will always be rounded up to the nearest nickel? I guess that's not really a question, of course they will.

So, under this act, my interpreation is that the penny will still be used, just no more will be made. Kinda like what the US did with the two-dollar bill.

It'd be cool if some sort of program was created to recycle all the old pennies into new coins or something else.

Uh, the penny would still be legal tender and not totally removed from circulation under this law. Only production ends.

Sorry, I think this is crazy. I'll oppose this bill.

This makes fiscal sense. It costs more to produce a penny than they are actually worth. There's no reason to continue to make pennies.

Sounds reasonable. As long as the current pennies remain active.

But what if we run out of pennies?!

Yeah, that's exactly what I said my interpretation was. What's your point?

I still think it'd be a good idea, as a way to phase out the penny, to think of some sort of recycling program so pennies aren't just thrown away.

The point being obviously that since pennies will still be used, recycling is totally unnecessary and you are only trying to complicate the law.

I'm throwing out suggestions. Call that complicating the law if you want, I don't care.

I'm saying if another purpose being considered is to phase out the penny, which I've heard of from other Senators as a possibility, I hope the Senate will then consider some sort of a recycling program.

That is an unreasonable suggestion. Or, to use your term "dangerous".

Referring to phasing out the penny, or recycling old pennies? And why do you think it is unreasonable?

Phasing out the penny would be unreasonable because not all of our transactions currently run to the nearest nickel. Pennies serve a purpose, it is the cost of production that makes a proposal to end production hold merit. Pennies haven't lost their use as a currency simply because production ends.

You make fair points. I never said I supported phasing out the penny, I've just privately heard it come up. I'm just saying if it does come to that, I hope the Senate will consider some sort of recycling program rather than billions of pennies laying around in our houses and in dumps.

I think we would if it came to that, because lord knows all that copper could be used for something, but we won't be phasing it out so much as we are stopping production. That said, in a way this is the beginning of a phasing out because pennies do not last forever...

30 years is a long time though.

Oh I know. I am not saying we should not go through with this bill. That said, this is a form of phasing out, albeit an extremely slow one.

Are we ready for a final vote? :)

I've taken a random interest in this bill!

Using real life stats, according to the Mint, it cost 1.79 cents to make a single penny (http://en.wikipedia.org/wiki/Penny_%28United_States_coin%29#Metal_content_and_manufacturing_costs), meaning for every penny we make, it's created at a 0.0079 (of a dollar) loss. In 2010, we created four billion pennies (http://en.wikipedia.org/wiki/United_States_Mint_coin_production), which amounts to a loss of $32 million. This act would reduce the supply of pennies that would've otherwise been in circulation by (using the last six years to create the average) an average of 5.8 billion pennies a year.

At the current loss, an average of 5.8 billion pennies a year amounts to roughly $45.8 million a year in savings.

But Duke's comment deserves some attention:


The Senator is correct, it doesn't make fiscal sense to continue to make pennies, but it also doesn't make fiscal sense to continue to create nickels, either.

It costs at least 7.1 cents to make a nickel. (http://en.wikipedia.org/wiki/Nickel_%28United_States_coin%29#Metal_value) (Some other sources put that number at 7.7 cents.) Using the same six year average (which is lower than the actual average, really, given the tightening of the money supply in 2009), we created an average of 943.2 million nickels a year.

At a 0.021 loss in creating each nickel, we lose an average of $19.8 million a year creating a comparatively much smaller amount of nickels.

As penny supplies in the overall economy tighten in the coming years, we may be in a bit of a bind. If we eliminate pennies altogether and round up prices, the Mint will be forced to create a lot more nickels, which would more than offset the savings we would make by stopping penny production due to the loss on nickels being nearly three times the amount of loss on manufacturing pennies. Even simply stopping penny production indefinitely but not mandating prices must be rounded up may cause penny shortages after several years, with some retailers rounding up prices independently, forcing the mint to create more nickels to compensate anyway.

Because of that, and the halfhearted method of this bill in trying to stake out a position somewhere in the middle of the status-quo and stopping penny production and the legal tender of it altogether, I don't actually believe this bill will really do much. Short term savings will, in substantial likelihood, be erased by increased losses after several years' time anyway.

You've made some excellent points, Marokai. Certainly changed my opinion on the bill.

Perhaps we could get rid of the penny and start minting zinc nickels? There's no reason why we have to spend 7.1 cents per nickel when we can clearly mint coins cheaper.

I definitely think that if we're going to get rid of pennies at all we should go at it very seriously with a more comprehensive plan than this. Stop penny production, and eventually, mandate rounding up prices, and use a similar formula we make pennies with to make nickels instead. It makes nickels cheaper, rounds up costs, and at that point no coin we make is at a loss.

What if I don't want to pay $1.50 instead of $1.46??? :P

Well personally I don't mind having pennies. Talk to Jbrase. :P

Valid idea behind the bill, but the points made by Marokai are valid. I'd support it but prefer a replacement of creating nickels in a cheaper method also be implemented.

After waiting for about a week, I see no amendments have been proposed. So I am bringing this to a final vote.

Please vote aye, nay, or abstain.

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Nay.

Aye

aye

Nay.

Let's just wait until a dime is worth what a penny is today and then just lob off a zero and call it a day.

Aye

NAY!

What Snowguy said.

Why?

It would also make fiscal sense to get rid of the defense department.  But it doesn't make "common sense".  :)

Penny-wise and pound foolish say I.

/sigh

In the short run it makes fiscal sense. In the long run, it is confusing, will tighten the penny supply without any plan on how to deal with prices, and will force the Mint to increase production of nickels, which have three times the loss of creating pennies, erasing most of the savings you get from stopping penny production.

This bill needed amending to something more comprehensive than a shortsighted half-measure. It also makes 'fiscal sense' to get rid of nickels, but you're not doing that, are you?

What's the point of being Game Moderator if few people listen to what I say?

Uh, pennies will still be circulated so the problems you forecast wont occur until down the road. Besides, shouldn't the mint decide what composition to use for coins. It doesn't make sense that legislators would have to determine what specific alloy is used. That's something I'd consider an executive power.

Coin production isn't exactly something that's out of the hands of the Mint either but it doesn't seem to be stopping you.

"The problems that will occur will happen later, so why the hell not?" is not a good rationale, however. If you admit this is flawed, but the problems don't happen until "down the road" why the hell are you passing this? If something is flawed, you don't pass it!

Under the Constitution, the Senate is given the power to "establish coin and currency". We have the power to determine what the currency and coin we use will be. The executive, then, must act. So, whoever is determining how these are made, should make nickels more cost effective.

Nay

It is a shame because I really liked the concept. It needed modification which it didn't get.

I echo NCY's concerns.

Nay

Current tally: 3 ayes, 5 nays

This has enough votes to fail. Senators have 24 hours to change their votes.

Nay

With 3 ayes and 6 nays, this bill has failed.