Coinage Reform

I celebrated my birthday today (it was a week ago, but for reasons I won’t go in to I celebrated it today), and among the presents my mother gave me was a not insignificant number of US $1 coins. This likely seems like a strange gift to many of you. (I kid that there will ever be many people reading this.) But I think it was an incredible gift.

You see, coinage reform is something that turns me into a giant squid of anger. Getting rid of the stupid, useless, worse-than-worthless penny is literally the easiest, most logical thing that this country could do. Sure, the savings would be small in comparison to the overall budget but it’s just so ridiculously obvious and easy to do that it’s only through the absolute intransigent incompetence of our lawmakers that it continues to drag on our economy. CGPGrey did a great video on the topic which I highly recommend, whether you already realize the preposterous stupidity of our continued production of those copper and nickel discs of suck or not. (I wasn’t kidding about getting worked up about this.)

Anyway, along with getting rid of the penny, I also think we ought to get rid of the dollar bill. This is a bit less blatantly obvious than it is with pennies, but still a good policy. Bills do cost less to produce than coins, but their lifespan is significantly shorter. Look at the coins you have, and chances are you’ll have some from 30 years ago, at least. I’ve seen 60 year old coins in circulation, and it’s entirely possible there are older ones around. You might see 15 year old bills in the higher denominations, but singles? You might go back 5 years, if you’re lucky. Printing dollar bills is penny wise and pound dollar foolish. This is on top of the fact that coins may be easier to process mechanically than bills (the vending machine industry is a bit conflicted on this), and that when people have proper, useful coinage systems that actually facilitate commerce, they actually prefer coins over bills.

Now, undoubtedly many (as if) of you are saying, “but I prefer using bills!” Yeah, read the sentence again. Useful coin systems that facilitate commerce. Ours is not that. The penny isn’t worth enough to be useful, and neither really is the nickel. The dime is too small to handle easily, and the dollar coin is too similar in size and shape to the quarter. Really, the quarter is the only remotely redeemable (in multiple senses) coin we have. In my opinion, we should scrap all the coins we have now. (Not literally, at least not all at once.) We should redesign all of them from scratch simultaneously.

What would my new coinage system look like? The denominations would be $0.10, $0.20, $0.50, $1.00, and $2.00. Preferably, we’d also add a $5.00, because we know we won’t be able to add it when we eventually start needing it, so we should just get it over with now. The new dime would be the size of a current penny, and a non-circular curve of constant width. Let’s say 7 sides. The $0.20 would be a circular coin the size of the current nickel, perhaps a different thickness and weight to differentiate it from such. The $0.50 would be a curve of constant width slightly smaller than a current quarter, with a different number of sides from the new dime. Preferably not 11, since that’s the number on the simmilarly-sized Canadian $1.00 piece, and while the size would be notably smaller than the Loonie (which is slightly larger than our current quarter), it’d be best to be safe. Next, we can actually keep our current $1 piece. (Though start off at the negotiating table saying you want to redo it, and offer that as conciliation. Yay politics.) Finally, our $2.00 piece would be a curve of constant width with a different number of sides from the dime and half-dollar, slightly larger than the $1.00 coin. Can you guess what I’d recommend for the $5.00?

Optimally, these wouldn’t be the only reforms. This would be paired with two other major reforms: First, no more Presidents on coins. Nor any state-specific imagery. Not even the Statue of Liberty, because while that’s in both New York and New Jersey, eventually some nobody senator from Wyoming would get annoyed and want to put something from Wyoming on there. Lady Liberty in general, fine. Seal of the United States, fine. Bald Eagles, fasces, shields, and basically anything else we put on coins before everything started to go downhill when we put Lincoln on the penny in 1909, fine. But no longer can our coinage be reduced to politician worship. People’s attachement to Lincoln is a big part of why we are still burdened with the penny. Yes, Lincoln did great things, but the purpose of coinage is not to reward politicians.

Secondly, and less obviously related, we need to start showing prices with the taxes already added in. Part of the reason we hate coinage is that we can’t start sorting it out before we reach the till. Rather than taking our own unproductive time to make change, we wait until we’ve been rung up and use the cashier’s productive time to take care of it, or we give in larger denominations and make the cashier sort it out. As far as efficiency is concerned, this is preposterous. Yeah, business owners won’t like it, because it will make more apparent the differences in taxation across state lines. And the gain in efficiency probably won’t be enough to employ fewer cashiers. Maybe it’ll save a few bucks on credit card processing fees. But it means you’re being honest about what you expect people to pay, and people can make informed decisions about their spending.

I don’t expect any of this to ever happen, of course, but it’s such an easy argument to make that I can’t see myself not making it any time soon.