The 7-Eleven clerk paused for a moment as she was fishing out change from the cash register for my $2.64 purchase using a five dollar bill.
She had only a one dollar bill. As she started counting out quarters a coin with gold coloring came up. Holding it in the palm of her hand, she looked at it for a moment and then held it up for me to see.
“Is this a dollar coin or a quarter?” she asked.
I replied a dollar and then made a remark about how it is ridiculous the government ever came out with them in the first place.
At any rate, I left with a “gold” dollar coin knowing when I go to spend it the odds are it will raise an eyebrow or two or, if I’m really unlucky, I will get a clerk who has no idea what it is.
Welcome to 2020 when the United States government that accepts electronic transfers for your taxes still operates in 1781 when it comes to the realm of physical currency and coin.
Even more insane are $2 bills that are still being printed occasionally while the Department of Treasury actually had the good sense to stop minting dollar coins.
Two dollar bills represent less than one percent of the currency in circulation. Although they are still in circulation and are printed from time to time. The last batch came off the engraving presses in 2003.
Unlike nickels and coins that cost more to mint than their face value, the $2 bill had been viewed by the Government Office of Accountability as a way to save $44 billion in printing costs over 30 years or roughly $150 million a year if a large chunk of the yearly printing of $1 bill was replaced by a $2 bill by eliminating the need to print one of every two $1 bill for every $2 bill printed.
Like all theories it tends to work well in a vacuum. In reality, people eschewed the $2 bill for most transactions. It doesn’t help that cash register drawers aren’t designed to accommodate them.
But the printing of $2 bills isn’t a waste, per se, as they represent real value even if they are being held.
The same can’t be said in the minds of most people when it comes to pennies.
The government mints $8 billion worth of pennies each year. The Department of Treasury estimates $62 million worth of pennies – or 8 percent of what is produced – is “lost” each year. They end up at the bottom of desk drawers, in sofa cushions, hoarded in jars, or simply discarded in trash by people who perceive their value is of little worth.
About the only economic activity dependent on pennies any more are the firms that place coin machines in stores that allow you to “convert your coins into cash to allow you to buy anything you want.” Of course that’s after they take at least an 11.9 percent cut.
The fact that such a seemingly absurd pitch resonates with people that essentially contends they are magically turn legal coins into something that has the value to purchase goods and services when coins already can do that should tell you pennies need to go.
Canada managed to get rid of them in 2012 without an economic collapse.
It was easy to do. All non-cash transactions still use “pennies.” Those done in cash are rounded after the final total – including sales tax – is reached. If the cost of the transaction ends in 1, 2, 6, or 7 the final digit on the bill is rounded down to 0 or 5. If it ends in 3, 4, 8, or 9 the tab is rounded up to 0 or 5.
There was fear at the time retailers and big corporations would get rich off the little guy. Subsequent studies have showed it is essentially a wash when it comes to how a consumer or a business comes out financially at the end of the day.
The state of California in collecting and refunding income taxes each year goes a step further. They simply drop all numbers to the right of the decimal on the bottom line and you pay taxes – or receive a refund – only in dollars.
Today, more and more people are using debit cards and/or credit cards for day-to-day transactions made in person. It’s gotten to the point I’ve seen people use an ATM at the Yosemite Lakes general store in Tuolumne County off Highway 120 to purchase a single postcard stamp for 35 cents.
As we make more payments electronically – even in person with apps on our smartphones – you’d think the federal government would stop minting pennies.
The latest U.S. Mint figures – compiled in 2016 – indicate it costs 1.5 cents to make each new penny. Given 8 billion are minted each year, dropping pennies would save taxpayers $80 million a year.
And what are we spending $80 million on – a coin that most view as worthless.
It’s true if you followed Ben Franklin’s adage, were persistent, and had patience you could have a tidy sum in a year’s time.
One way is to start putting aside one penny in a jar on Jan. 1 and then doubling the amount in pennies and/or coin on each day that follows. The compound savings plan would have $667.98 set aside by Dec. 31.
But when it comes down to it, a penny spent by the government is one and a half pennies wasted.
This column is the opinion of Dennis Wyatt, and does not necessarily represent the opinion of The Ceres Courier or Morris Newspaper Corp. of CA.