HOUSE BILL: The Currency of Atlasia Act (Passed - Sent to VP/PPT)

[Unconditional Surrender Truman]

Talk about government waste. We could save hundreds of millions of dollars every year by removing pennies and nickels from circulation.

Yes, can we please take this opportunity to eliminate the absurdly expensive and incredibly obsolete 1¢ coin, the production of which costs near double its value and whose only discovered use is scratching lottery tickets?

[OneJ]

Alright then. If everyone else agrees with tossing the penny out, I will propose an amendment.

[Southern Senator North Carolina Yankee]

Talk about government waste. We could save hundreds of millions of dollars every year by removing pennies and nickels from circulation.

Yes, can we please take this opportunity to eliminate the absurdly expensive and incredibly obsolete 1¢ coin, the production of which costs near double its value and whose only discovered use is scratching lottery tickets?

Surely such is not exclusive the capabilities of the penny?

[Southern Senator North Carolina Yankee]

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I mean hell, OneJ, that took like 30 seconds.

[Southern Senator North Carolina Yankee]

First 72 Hour Analysis:

Sponsor (OneJ) posted in the first 24 hours: Yes

Other Members:
Peebs: No
NC Yankee: Yes
Simossad: No
Leinad: Yes
Pessimistic: Yes
Clyde: Yes
Santander: No
Dereich: Yes

[Clyde1998]

I'm happy to abolish the penny, as it serves no really purpose in everyday usage and costs more money to mint that it's actual value (as others have pointed out).

[Unconditional Surrender Truman]

Talk about government waste. We could save hundreds of millions of dollars every year by removing pennies and nickels from circulation.

Yes, can we please take this opportunity to eliminate the absurdly expensive and incredibly obsolete 1¢ coin, the production of which costs near double its value and whose only discovered use is scratching lottery tickets?

Surely such is not exclusive the capabilities of the penny?

Sorry, I forgot penny loafers and wishing wells.

[NeverAgain]

Okay, let me start by saying that OneJ's delay in putting out the amendment is because of my discussion  on the abolition of the penny. So, if you're blaming him for being late, blame me .

Anyways, I am a strong supporter of the penny, and the nickel for that matter. Here's why:

1. The Abolition of the Penny would mean that prices would be rounded to the nickel (or the dime if we abolish the nickel also, an even worse idea). This would mean that prices would raise by a cent or two to account for that (likely no rounding down for merchants or vendors), and as the current majority of prices end with 9's and economists agree that businesses are guided by a desire to maximize profits. There is no obvious incentive for businesses to set prices in a way that will lead to rounding down, so we'll see a rise in prices and the creation of a "rounding tax". Which is huge over a elongated period of time, and drastically hurts the poorer individuals, who should be helped, not hurt by this government.

2. A less thought about idea, but the same still stands that the abolition of the penny would hurt many charities. Charities need pennies. There are thousands of small charities that depend on penny drives to bring in donations. Many individuals think nothing of pouring out their old penny jars to support these drives, but they won't part with nickels, or coins above, so easily. And they work! Notable charities like Ronald McDonald House Charities, the Leukemia & Lymphoma Society and countless local groups rely significantly on small, yet critical, penny contributions. Indeed on Lincoln's birthday in 2009, the Leukemia & Lymphoma Society celebrated the 15 billionth ($150 million) penny collected by school students across the country for their "Pennies for Patients" program.

3. As stated, if we're going on costs, nickels (which cost about 9.4 cents to make) are even less cost-effective, and then that's up to 5 cents that people could be losing do to an increase in prices. Pennies cost about 1.4-1.5 cents to individually make (according to the WSJ), but as stated nickels cost 9.4 cents individually, which means you can make about 6.7 pennies for every one nickel. The cost benefit lies much more with the penny than the nickel, but even so, getting rid of the nickel is not a good idea.

4. The penny is not wasting productivity. Retail workers are not paid according to their productivity. It takes leaps of logic to link time "wasted" with pennies to a dollar equivalent productivity loss and then intuitively suggest time wasted could have been used to clean, restock, shelves, or serve consumers.
The more troubling problem arises with the assumption that removing the penny from circulation will eliminate the productivity loss. Such conjecture is illusory. In fact there are many reasons to believe the net time associated with consummating transactions will, if anything, increase not decrease without the penny.

5. Eliminating the penny will impact inflation, both real and perceived. Even a small increase in inflation mounts to considerable sums since all government outlays (e.g., Social Security, welfare, pensions, paying interest on the national debt) and many private sector costs (wages) are tied to the Consumer Price Index.

6. Eliminating the penny will cost the government money: First, the Mint's fabrication and distribution costs include fixed components that will continue to be incurred whether or not the Mint produces the penny.  These fixed cost components and other overhead allocated to the penny would have to be absorbed by the remaining denominations of circulating coins without the penny.Second, under current Mint accounting, the nickel costs eleven cents to manufacture. Since nickel production will increase without the penny, it's hard to see how you save money by making more nickels that are losing more money.These fixed cost components, and other overhead allocated to the penny, would have to be absorbed by the remaining denominations of circulating coins without the penny.

7. The elimination of the penny would drastically hurt the zinc industry, which also had put its prices (and therefore pennies) at extremely low rates, and is going down. With global demand for zinc now slowing, particularly in China which has been the biggest consumer in recent years, prices have fallen significantly. Zinc prices dropped below $1445 a metric ton at one point last month, down 14% from a year earlier. Prices had spiked to a record $4580 a metric ton in 2006. Us pulling out of the zinc trade, and would likely be the nail in the coffin to the industry. And leaving the zinc trade means killing many jobs, and factoring that in with the zinc industry already being at extremely low levels currently, means that this could collapse the industry.

8. The penny has sentimental value. Now, while this may not be important to some heartless, soulless, and evil individuals here, I feel that this is a major issue. The penny serves as a testament to one of, arguably the best, President. It has been shown as a memorial to him, and still serves as a legacy to him, (the changeability on the 5$ bill is much more difficult and is rarely done, as compared to the penny). Anyways, we had and have the March of Dimes to honor and help cure polio (a disease that is on it's last legs likely due to efforts of the dime). We've honored TJ on the nickel. I think we should continue to honor and continue the legacy of Atlasian's oldest coin.

I stand firmly in negation of the abolition of the penny.

[Southern Senator North Carolina Yankee]

But NeverAgain, OneJ has a long history of offering amendments he doesn't actually support, why should such be cause for delay?

[Leinad]

1. The Abolition of the Penny would mean that prices would be rounded to the nickel (or the dime if we abolish the nickel also, an even worse idea). This would mean that prices would raise by a cent or two to account for that (likely no rounding down for merchants or vendors), and as the current majority of prices end with 9's and economists agree that businesses are guided by a desire to maximize profits. There is no obvious incentive for businesses to set prices in a way that will lead to rounding down, so we'll see a rise in prices and the creation of a "rounding tax". Which is huge over a elongated period of time, and drastically hurts the poorer individuals, who should be helped, not hurt by this government.

You made a lot of other points and some of them are certainly good (I'm kind of undecided on this as of now--yes, a person to sway! ) but I'm curious: do we really know they would round up?

I see a lot of prices ending in 5s already (apparently almost half as common as ending in 9s if this chart is to be believed), and I feel like the whole idea of "psychological pricing" would continue--in that they wouldn't round up, and would most of the time round down. I mean, if >20% of the prices ending in 9s are rounded down and the rest rounded up, the average shopper would be saving some amount of money, right?

[NeverAgain]

But NeverAgain, OneJ has a long history of offering amendments he doesn't actually support, why should such be cause for delay?

Well, he said specifically, "I'll delay the amendment due to this discussion".

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The claim that rounding will have no appreciable effect on the consumer is predicated on the notion that there is an equal 20% probability of purchase prices ending in a particular digit. In fact, a whole bunch of evidence suggests that the equal probability assumption is false (not saying that's your claim, just stating it for clarification). The 22-year old study published by Marketing Bulletin yet researched in '95 by Palmerston North (which I am unsure if we can go on due to it's age, and the fact the study was done in New Zealand.), states that it is a 61-25 split on endings in 9 vs. 5. So, even if we were going on this non-Atlasian study, 9 is still the overwhelming ending for pricers and vendors in New Zealand, and is no doubt even more popular in Atlasia.

A Congressional Testimony, by Raymond E. Lombra, Professor of Economics at Pennsylvania State University, stated that: "A careful statistical analysis based on the information available on the distribution of prices in the United States strongly suggests that, on balance, prices will be rounded up.
This rounding "tax" will have a significant adverse effect on consumers. A conservative estimate places the tax in the $600 million per year range." Prof. Lombra went on to state that the "
Federal Reserve estimates that those with incomes under $10,000 - $15,000, non-whites and Hispanics, and those adults with less than 12 years of education pay for more than half of their total purchases in cash. Since only cash transactions will be subject to rounding, it follows that the rounding "tax" will be regressive, affecting the poor and other disadvantaged groups disproportionately.".

Another study places a conservative estimate of the rounding tax on consumers at "totalling over $2 billion after five years," excluding purchases made by those under 18. This is a HUGE amount for us to say should be just laid upon the poorest among us.

So, is there a chance that a very few won't lose money from this, and in even rarer cases, gain some? Yes. But the vast majority of individuals, and disproportionately among those who need a leg up, will be losing hundreds of millions and billions out of their pockets.

[Southern Senator North Carolina Yankee]

Yes, but the notion behind offering an amendment you don't support is to force the discussion. For instance, delaying the amendment produced a dead bill. Me offering the amendment forced this discussion to happen, no?

[OneJ]

But I was discussing this with Governor NeverAgain before you moved on with the amendment. That's why I didn't put it up.

Now Gov. NeverAgain has some good points on why the penny should stay such as the following (a few of his strongest points, IMO):
-Rounding: For example, when you take away the penny, you won't see prices like $1.99 anymore. Instead, you may see $3.95 or $4.00. However, as we all know, businesses are more likely to charge $4.00 to get some of that extra guap. It could hurt, although it would probably be insignificant.
-Zinc Industry: Like Governor NeverAgain said, there would be a loss of jobs if we don't include the penny. He pretty much explained it too.

But here are some pretty good counterarguments:
-The cost of making the penny: During the year of 2016, the penny's cost to produced rose to 1.5 cents which is actually costs more than its own worth.
-Bad for the environment: Pennies are made of mostly zinc. Actually more than 97% zinc. 2.5% is metal content. According to the Enviromental Protection Agency, zinc ores contain anywhere from 3-11% metallic zinc. Zinc contains other metals that are actually toxic such as cadmium and lead. Those metals in the mines contaminate the soil, plant life, and water. A lot of energy is also required. You have to extract the energy from the ore, roll it out and stamp onto the coins, and then transport those coins to the banks. DesignLife-Cycle.org, a site created by students of the University of California, calculated that just transporting the pennies to the banks - not even including any other stages of production - actually releases 1.5 million metric tons of carbon dioxide (CO2) into the atmosphere every year.

[NeverAgain]

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As stated, this is very much overstated, and should be looked at in perspective to everything (nickels cost about 9.4 cents, yet would be even worse to get rid of, and I hope no one here wants to). And according to Navigant's Report the Federal Government will actually LOSE money, without the penny:

First, the Mint's fabrication and distribution costs include fixed components that will continue to be incurred whether or not the Mint produces the penny.  Navigant estimates this fixed component at $13 million in FY 2011. Plus, there is $17.7 million in Mint overhead allocated to the penny that would have to be absorbed by the remaining denominations of circulating coins without the penny.

Second, under current Mint accounting, the nickel costs eleven cents to manufacture. In response to a 2006 question from the Subcommittee, the Mint put forward a scenario where nickel production doubled without the penny. It's hard to see how you save money by making more nickels that are losing more money. The data bears this out. Applied to FY 2011 cost and shipment data, the Mint would have incurred an additional net cost of $40.4 million without the penny last year.

Navigant concludes that with existing fixed costs, and the nickel substitution scenario outlined by the Mint, eliminating the penny would likely result in increased net costs to the Mint of $10.9 million, relative to the current state.

The penny's elimination would not eliminate government losses, and will actually increase the overall loss to the Mint due to increased production of the nickel and ongoing Mint overhead costs. Moreover, as stated, consumers would be hit with a "rounding tax", the last thing this Congress should consider with our current fragile economic climate.

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I don't doubt that transportation, of all currency, costs too much on our environment, but I would say that there, the focus should be making our cars (and trucks, and other transportation vehicles) more fuel efficient. I think that we should be focusing on the systemic problem of all of our transportation vehicles damaging our environment, not just the penny's transportation.

[Leinad]

you may see $3.95 or $4.00. However, as we all know, businesses are more likely to charge $4.00 to get some of that extra guap.

But then why isn't it $4.00 already? I asked this before but Nev apparently decided he'd rather answer other questions instead. I think that for the same reason prices are $3.99 instead of $4.00, some businesses would continue the act of "psychological pricing" and make it $3.95. Maybe very few businesses would do that, I'm not really sure, and I can see an argument either way. I do understand the point Nev was trying to make, that (if we start off with the assumption all or almost all $X.99 prices would round up instead of down) that would suck for the consumer, especially poorer consumers. So, I don't want that. If someone could give some insight on where they think the rounding would go, that'd be peachy.

[NeverAgain]

you may see $3.95 or $4.00. However, as we all know, businesses are more likely to charge $4.00 to get some of that extra guap.

But then why isn't it $4.00 already? I asked this before but Nev apparently decided he'd rather answer other questions instead. I think that for the same reason prices are $3.99 instead of $4.00, some businesses would continue the act of "psychological pricing" and make it $3.95. Maybe very few businesses would do that, I'm not really sure, and I can see an argument either way. I do understand the point Nev was trying to make, that (if we start off with the assumption all or almost all $X.99 prices would round up instead of down) that would suck for the consumer, especially poorer consumers. So, I don't want that. If someone could give some insight on where they think the rounding would go, that'd be peachy.

I gave you an entire answer on this, and psychological pricing. I am a little confused on how I didn't answer it. If you want to clarify your question, that would be nice, because I think the answer is in my previous post.

[Southern Senator North Carolina Yankee]

Fascinating discussion I must say.

[Southern Senator North Carolina Yankee]

I am inclined to say my opinion has been swayed in favor of keeping the penny, but I would like to see any thoughts remaining that go the opposite direction, be it from Truman or others in response to Never.

[CMB222]

I am inclined to say my opinion has been swayed in favor of keeping the penny, but I would like to see any thoughts remaining that go the opposite direction, be it from Truman or others in response to Never.

Agreed. Keeping the penny does seem like the better idea right now.

[Southern Senator North Carolina Yankee]

I withdraw the amendment in that case.

[Southern Senator North Carolina Yankee]

Anything else that should be added to the discussion in the way of points one way or the other?

[OneJ]

Would any of you like to draw up ideas on who should be on each denomination (whether it be in real life or in Atlasia)?

[Southern Senator North Carolina Yankee]

Would any of you like to draw up ideas on who should be on each denomination (whether it be in real life or in Atlasia)?

I am going to take this as a no.


If anyone does have desires to do so, or make any other changes. Please say so in the next 24 hours.

[CMB222]

Would any of you like to draw up ideas on who should be on each denomination (whether it be in real life or in Atlasia)?

I would think Atlasians would be best but I don't know enough about Atlasia's past to make suggestions on that.

[Leinad]

Why does it have to be a who? It might be a better idea to have natural features like the Appalachian mountains, or man-made structures like the Statue of Liberty, or perhaps American inventions or achievements like the Moon landing--i.e. instead of a person, a place or a thing.

If we do go with people, it should probably be RL ones, as Atlasians would be awkward given that several contenders are still active in the game, and there would be inconsistencies and points of contention over what pictures we use for them. Should we go the real life people route, some nominees could include (only listing dead people, partially to keep me from just hackishly naming a bunch of people I like): MLK, Thomas Paine, Susan B. Anthony, Mark Twain, H.D. Thoreau, Muhammad Ali, Jackie Robinson, Jimi Hendrix, Charlie Chaplin--or if those suggestions sound too fun and interesting, go the boring route and pick a bunch of old Presidents.