In my article “Should Pennies Be Made From Recycled Plastic“, I suggested replacing pennies with recycled plastic. The idea being that if we replace a penny with a plastic instead of metal, the benefits would be two-fold. First, the recycled plastic version would be much cheaper to create that the metal version, and secondly we would be cleaning up the environment by recycling plastic instead of dumping plastic in landfills and the oceans!
Since the plastic penny idea has multiple ways that it could benefit our society, I still think it holds some merit. That said, perhaps we should consider upping the ante by creating a new secondary currency system. In this new currency system, the zinc penny equivalent would be replaced with a penny that would be equivalent to what a dime is worth in the current currency model. Then have the rest of the coins and dollar bills flow the same proportional valuation system as today. So a new currency nickel would be worth 5 old dimes, and 1 new currency dime would be worth one dollar in the old currency.
The two currencies could float together for some specified time period, oh let’s say 10 years, with the old currency no longer accepted at the end of the 10 year time-frame. Obviously, the old currency could be taken to banks to be converted into the new currency at that point.
The approach of using a new version of our currency would breathe value back into the penny and make coins worth picking up once again. I think it’s important to have the penny because it makes the money valuation system make sense. Not having the penny would be like having a piano without certain keys missing. After all, the currency system is based on math, and we wouldn’t consider skipping numbers in math would we?
Initially, I thought the government could implement some type of country-wide deflation, but too many clever crooked people would find ways to take advantage of such conversions. The rolling currency idea would be less painful that forced deflation, and in a way, it would have the save benefits of deflation since the money value would jump scale 10 fold.
Perhaps this process could be performed every 100 years, if inflation make the penny not worth minting again in the future…
Well here are my two “outside of the box” thoughts on the penny problem, and I’m done thinking about it now. What do you think, do you have any clever ideas that you would like to share other than dropping the penny altogether?
MR
I don’t think that most folks could handle that amount of math day-to-day!!
The Canadians and Europeans do it, and I’m sure other countries do too.
Shoot, many countries are even bilingual on top of that. Maybe U.S. folks can’t handle it, but I think most could.
Maybe I’m missing something, but I just don’t see the benefits to confusing everyone by creating a 2nd currency. The costs of doing something like this would be massive. Think of all the machines that accept coins that would need to be retrofitted. Then there’s the hassle of creating the manufacturing process for these new coins. It sounds like it would be a mess.
Why? Canada and other countries have been doing multiple currencies for a long time. Look at Canada, they take both Canadian and US money typically. Look at Europe…
I don’t see why it would be massive cost wise… The existing facilities and machines would be refitted to print the new money, and within a 10 year timeframe, the old money would be retired for use.
I think if thought is put around it, it can be done… It’s not like we are creating the infrastructure for an alternative energy source, everything is in place already… The most costly parts would be just refitting the existing machines and conveying the plan to the public. But is that really that costly?
It beats crippling the monetary system by removing a logical piece of currency.
Other than the elimination of the penny, do you have any ideas?
I personally don’t think it would work. Unless there is an incentive. It took a while for people to use metrocards back in the 90’s and then they made a financial incentive and changed everyone’s thinking in a few months.
I think it would be complex, but would work. We’ve changed our currency before in the past.
Mexico also revalued the peso a while back. It went from pesos to neuvo pesos. Of course, they had rampant inflation and other currency problems.
Personally, I think they should just round everything to the nearest 5 cents, similar to what they do in London. They can still keep electronic transactions in pennies, which will soon account for almost all spending anyway.
Wow, I didn’t realize that Mexico did that! So the idea I thought of has been implemented… Awesome (well sort of) 🙂
I’m skeptical but open minded. 10 years seems excessive. The Euro was introduced and fully transferred over in about 6 months. There’s no reason it couldn’t be done here in that time as well. Of course, with more and more people banking and paying electronically, it only makes any type of revaluation that much easier and less of a reason to deal in coins and paper.
Hmmm, perhaps a 6 month frame would be better. I just picked an arbitrary number for the time. In fact, I think you are right a shorter time period would probably be better.
I would like to see a better more intelligent form of currency in the future too…