Monday, May 10, 2010

A Dollar Bill For Your Thoughts?

Posted By on Mon, May 10, 2010 at 2:12 PM


Did you know that it costs the federal government almost two cents to make a penny? Or that it takes almost nine cents to mint a nickel?

That might sound like small change but having a cheaper currency might make a big difference in the U.S. economy. According to an article in today's Wall Street Journal, no other stable nation has changed the metal content of its coinage less frequently than us.

Come on. What can you buy with just a penny anyway? Or with just four pennies? Might as well use a nickel, right?

Not so fast, says the group, Americans for Common Cents. Apparently these guys have been lobbying on behalf of the penny for years, claiming it is a "hedge against inflation." Essentially, it prevents retailers from simply rounding up their prices to the nearest nickel.

Nickels aren't so great either, though. Nickel is the most expensive metal used at the U.S. Mint, and it's also the most allergy-causing metal in the world—people with a nickel allergy develop an itchy skin rash wherever they contact the metal, sometimes even through porous fabric barriers, such as cotton. Kind of makes you want to be careful about what you put in your back pocket. Dimes and quarters contain nickel, too, so there's been talk of using non-metal substances for U.S. coins or switching to all-paper currency.

While less expensive production of money seems like a good idea in the long run, consider the cost of eliminating coinage entirely. No more coin-op laundromats, soda machines, gum ball dispensers, pay phones, parking meters ...

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