$ = $10

[A18]

I think the penny has pretty much become worthless. We should introduce a new dollar in exchange for ten of the old ones so that all our coins will be worth something.

[Fmr. Gov. NickG]

I'm not sure I understand your suggestion, but we should definitely get rid of the penny.  I hate having change in my pocket that I can't realistically

[A18]

Not exactly. I'm saying introduce a replacement currency, as France has done in the past, to make up for inflation (so the penny would be worth a dime, basically).

[Gabu]

I've actually said the same thing regarding the penny.  As it is right now pennies are basically nothing but loose change that take up space in your wallet and that you occasionally unload in a purchase when you have something like forty of them built up.  I'm not sure about the resolution method (the one I personally thought of would be to just round every price to the nearest multiple of five and then have people trade in pennies for nickels if they want), but I do agree that the penny is pretty much useless now.

[A18]

It's not just that. Even dimes aren't worth much.

Under this, a dime would be worth a (current) dollar, for use in soda machines. A quarter would be $2.50.

[Lunar]

The problem is what it does to people in debt.   Someone who still owes say, $100,000 for their house would suddenly owe a million dollars.

[A18]

No, because they owe 100,000 old dollars. Basically, you'd just gradually phase out the old stuff.

[Gabu]

It's not just that. Even dimes aren't worth much.

Under this, a dime would be worth a (current) dollar, for use in soda machines. A quarter would be $2.50.

True.  I didn't actually understand what you were talking about until I read it again; now that I do understand it I think it's a good idea.

[Fmr. Gov. NickG]

The problem with this is that I think people just don't like carrying coins around anymore...there isn't even a good place for them in most men's wallets.  Just look at the repeated failure of the dollar coin to catch on.  We should be trying to reduce the number of coins in use, not increase them.

[A18]

I just keep change in my pockets.

And if you only had bills, well, the lowest one could get you $10 worth of stuff. I don't know that there's much I'd buy for less than that.

[Dave from Michigan]

what about the penny candy store?

[Dave from Michigan]

seriously though, would this effect inflation?

[A18]

It would have no effect on investment; just the actual value of the currency (because everyone has less of it).

In other words, it's not going to help elderly people who made $25,000 back when it was worth $50,000. But it won't hurt, either.

[Dave from Michigan]

the problem with this is people would get confused and it sounds expensive and complex

[A18]

But it's not. It's just giving people one new dollar for every ten old dollars.

As currency flows through banks, old dollars can be scrapped for new ones.

[Dr. Cynic]

It sounds terribly complex. The metric system and celcius do too though, to Americans anyway.

[Dave from Michigan]

But it's not. It's just giving people one new dollar for every ten old dollars.

As currency flows through banks, old dollars can be scrapped for new ones.

some people will get confused plus it's a hassle and expensive to switch

[A18]

I don't understand how, though. It's just that ten old dollars would be one new dollar.

So say you go to the store. There'd need to be a new symbol for old dollars to distinguish between the two. If something's marked at 50 old dollars, it'll also be marked as 5 new dollars.

When old currency ends up in banks, they'll exchange it for new dollars when they give it back out (500 old dollars => 50 new dollars).

You'd always be able to go to the Federal Reserve and exchange old dollars for new dollars, but you wouldn't have to. It would just happen gradually over the course of a few years.

[KEmperor]

I understand what you are trying to do, it's not a crazy idea.  But I think it's a bad idea to revalue currency, it could lead to destablilization.  

[A18]

It wouldn't be any more expensive because we already print new bills every year.

It would be stable because only the UNIT of wealth is actually changing. The amount of wealth is the same; one thing in old dollars, one in new.

[Dave from Michigan]

where did this Idea come from did you read it somewhere or come up with it

[A18]

Originally? I came up with it when I was bored at lunch one day.

It was a typical lightbulb-on moment

[True Federalist (진정한 연방 주의자)]

The problem with this is that I think people just don't like carrying coins around anymore...there isn't even a good place for them in most men's wallets.  Just look at the repeated failure of the dollar coin to catch on.  We should be trying to reduce the number of coins in use, not increase them.

The reason the dollar coin doesn't catch on is that merchants are used to the dolar bill.  Cash registers have a place for the dollar bill but not the dollar coin.  It's all what people are used to.  The half dollar used to circulate until 1964.  Then when we got rid of the 90% silver coins, they decided to replace the dime and quarter with silverless coins, but the new half had 40% silver.  The result was taht people hoarded the halves and they disappeared from circuation.  By the time they issues a cupronickel half in 1971, the damage had been done.  People were used to not using the half.  That said, a 10 for 1 exchange isn't worth the effort.  Readjustments of the decimal place, are usually 100 to 1 for coins that have cents so that for example 1 old franc = 1 new centime.

As a personal quirk, I wouldn't mind seeing a scheme that used 1 mark = $50 with a fractional coin called the mill so that 1 mark = 1000 mills and 1 mill = $0.05.  This would enable the existing nckel, dime quarter, half and dollar coins to be used as 1, 2, 5, 10, and 20 mill coins respectively.  A 1 to 10 reverse dollar split would leave us withethe oddity of a 2 1/2 cent coin in the former quarter.

[True Federalist (진정한 연방 주의자)]

It wouldn't be any more expensive because we already print new bills every year.

It would be stable because only the UNIT of wealth is actually changing. The amount of wealth is the same; one thing in old dollars, one in new.

Actually it would have one small legal effect.  The amount of damages needed to insist upon a jury trial would be 10 times as much since 20 dollars would be worth 10 times as much under your scheme.

[MODU]

Philip,

Obviously you don't do any government accounting.  EVERY PENNY COUNTS!  

In all seriousness, I do not believe the penny should be removed from our system.  It may not seem like much, but say every morning you go down to the coffee shop to buy a cup of coffee for .71 cents.  For 260 days, you'd spend $184.60.  However, if you abollish the penny, your cup of coffee now becomes .75 cents (what, you think the coffee shop is going to cut you a break?).  Over the same period, your costs become $195.00, or $10.40 more for the year.  Now that is just from one purchase during the day.  Add up lunch, grocery store visits, etc, that's plenty of money each year you'd pay in excess just because you didn't like pieces of copper in your pocket.

What I do, and I recommend to you all, is keep a small cup of pennies in your office.  When you go out to spend something, take 4 pennies with you.  That way, the smallest change you'd end up with from your purchases is a nickel.  No more penny hassles.