Campfyre Stories

I am Ed. The often spoken of but rarely heard from Knight in Shining Armor! I am guest writing for the lovely and talented Fyregoddess because…well……..I am awesome, and she said I could. So, here goes, hope you enjoy!

I had an interesting conversation with my brother this weekend, a conversation that strangely reminded me of my trip to Spain years ago. It came up as my bro and I were about to head out for a little dinner. He grabbed off his desk a wad of $2 bills laying next to a roll of $1 coins, scraped a few out of the bankroll and jammed them into his wallet with the rest of his green. What’s the deal? I say.

Bro goes on to tell me how he was intrigued to find that they still print $2 bills and nobody uses them, same with the $1 George Washington coin and he has been doing his part to keep them in circulation as people are forgetting that this currency exists. Enough so that people have on occasion refused to accept it as legal tender.

This subject interested me in two ways… First is that people are refusing money, good spendable money. He has tried to give it to friends that he may have borrowed a couple bucks from and they would rather wait longer to get paid back than accept this money because they aren’t used to seeing it. Second it caused me to think about how we do use the money we have and the future of American currency.

I thought back to my trip to Spain almost immediately. Aside from remembering little more of the language than Give me beer, Where is the bathroom? I also remember that I liked the currency over there. At the time the cent roughly translated to the peseta, which was then the Spanish currency. I believe exchange rate was something like $1 = 120 peseta or something of the sort. So to use 100 peseta as $1 was not totally off the mark as far as teh currencies usability.

In Spain they had coinage up to 500 peseta, or for arguments sake, $5, they also had a bill for that same size, five hundred pesetas. It took a little getting used to at first but after a couple days I thought it was actually nice having the equivalent of $1 coins rather than bills. I pretty quickly grew to prefer it to carrying the paper money. In Spain also they did not round to one peseta, but instead, if memory serves me, they rounded to five. Having things round to something other than one peseta was not that big of a problem at all, the whole country did it just fine, no harm, no foul, no fight.

Either way, it didn’t lead to carrying some absurd amount of coins in your pocket, and there was never even one concern by a single person about how rounding to something other than one was a big deal. People would actually use the change in their pockets as money rather than how many people now often seem to just use bills and carry change. It seems that rarely do people actually use the change in their pockets here in the US, at least when compared to the above experience I have found that to be true.

So when thinking about American currency another interesting fact came up that some people know and some don’t. It’s costs more than 1 cent to produce a penny. At the time it’s minted it is worth less than the raw material and work put in to create it. The mints make up this deficit by selling commemrative coins and the such. The truth is however, the penny really of very little use.

It’s a debate people have had that the penny should go away in favor of the small coin being the nickel or dime. I personally would suggest the dime as it’s little more than a shift of a decimal place for our smallest denomination and it keeps us ahead of inflation for running into the nickel falling into the same hole the penny has too quickly. Further using the dime will allow us to simplify other coinage we have.

Now, the big argument I hear is, well what happens to things that are not exactly ten cents? Well, same thing that happens to things that aren’t exactly one cent, they get rounded. Sometimes up, sometimes down, it all evens out. When you apply tax to a purchase in almost all cases the outcome is not an even cent, it’s simply rounded. This can be shown by example, pretty common one. Let’s say something costs $9.99 and there is 7.25% tax. Well tax on that purchase is 72.4275 cents. So that is rounded to 72 cents, added to $9.99 and you pay $10.71. This is done on every purchase every day and simply accepted, as it should be. I prefer the decimal shift to ten cents rather than the slightly more arbitrary move to five because you still are rounding to factor of ten. This I feel will be a more accurate case for rounding being equal at the end of it all than a nickel, also far easier to swallow by the general public.

The argument that bro came up with that may be holding up the shift is that there will be political implications in deleting coins as they will be deleting the presidents depicted on said coins. This may or may not be valid, depends on who you ask, but as people find a way to get upset at everything I wouldn’t be surprised if there were people upset by that. However if you introduce new bills or rather new coins, that may be pretty easy to solve, maybe.

So, I am figuring that it would be not a bad idea to actually shift the coinage up. Drop the penny and nickel(and quarter as you will see why) and use the dime, fifty cent piece (reintroduced with appropriate design) and dollar coins. That way your coinage is 10, 50, 100 cents. The quarter would need to go with the nickel as there are problems with having something base 5(the quarter) with out a 5 cent piece.

I think one problem people have trouble wrapping their head around is a clear break at the number "1". We have "1" cent(which is really only one percent of a dollar), the root of coins starting at "1". Then we have "1" dollar (which is really only one hundred cents) but considered the root of paper money starting at "1".

It may be the case that people have a very hard time getting away from that distinction, and are afraid to see it go away. They want that line, because if coinage starts at something other than "1" or paper money starts at something other than "1", it becomes a problem. People don’t want to see the line blurred, they don’t like to deal with the understanding that the dollar and the cent are just different ways of saying the same thing, currency. This again may or may not be valid, but it’s a possibility.

The thing is, as we move forward, how many relavent things can be purchased for one cent? Really nothing. OK,how about five cents? I can’t think of anything. When is the last time you have made a purchase and your total for the transaction is less than a dime? Really, I don’t know that I expect to see that ever again in my life. So really I rarely make a transaction less than a few dollars. The only thing I can think of is vending machines and really does it matter if you snickers price is rounded to five or a ten? I don’t think so, vending machines have already tossed the penny as an option, why would it not be as easy to just make all prices base ten rather than base five.

As the value of currency shifts, shouldn’t the currency itself shift?

That all being said, I understand more where bro is coming from at least in part. Why not use these somewhat non-standard currencies? At the end of the day I think the dollar coin is a far more usable piece of currency than the penny, so I figured, heck why not give it a shot.

So today I had to go to the bank anyway, so when I got my cash I thought, let’s see how this works. How would you like your cash sir…….Do you have $1 coins and $2 bills? Yes on coins, but out of the bills right now. Bah, foiled in part, but I will go with the coins, and hunt down bills later.

So I grabbed the roll coins and the rest of my cash and headed off into life. As I walk back into work I pass the vending machines and decide to give it a whirl. I plunk in my $1 coin into the machine, and what do you know, one dollar is credited immediately and comes right up. I add the rest of the balance for the purchase and out comes my drink. Had I tried that with pennies I would have been given them back post haste. Maybe this has some merit after all.

So, I think that I may just start using $1 coins when ever I can, maybe for no other reason than my local friendly vending machine is a fan, but I wouldn’t be surprised if I find even more use for them. As for the $2 bill, well the jury is still out until I can get my hands on some, but I think I will use them just to see how often I get turned down. If nothing else it will be an interesting social experiment.

I then suggest you do the same. Go to the bank, get some off the beaten track currency, and give it a shot. Maybe you’ll like it, maybe you won’t, but at the least the reactions you will find from people alone should be worth the effort.