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Lincoln Cent------the end is near!!!
keets
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An interesting article on the cover of CW states simply that "Cent costs approach face value" and goes to detail how the cost of production has risen for the U.S. Mint. Hopefully this will relegate the Lincoln Cent and the Kennedy Half-Dollar to collector sets only and an eventual cessation of production. IMHO the powers that be need to rethink circulating coinage.
Al H.
Al H.
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If you get rid of the penny, think about this.
What's going to happen when your state wants to raise the sales tax?
Instead of penny, it will go up a nickel.
Think about it!
Glenn
And Keets, you got me on that movie. Not a 007 fan.
If that's true, why do we already have so many states with fractional sales tax rates?
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<< <i>If you get rid of the penny, think about this.
What's going to happen when your state wants to raise the sales tax?
Instead of penny, it will go up a nickel.
Think about it! >>
I've thought about it. At length. And my conclusion is that cent elimination with rounding to the nearest nickel will have absolutely *zero* effect on sales tax, inflation, and how much money poor people get.
According to the latest Mint report, it costs $0.0098 to make a one cent coin. Add in distribution costs to banks, and it comes to about 1.2c to put a one cent coin into circulation. Now factor in the time involved in making change to the cent, and counting cents -- it's a significant cost of doing business. Much money is to be saved, both by the government (that is, you and me) and by businesses through cent elimination.
Think about it.
The real question is, how high does copper prices have to go before pre-1982 cents are collected and sold for melt value?
At this point I would like to see the Lincoln cent make it to 2009, at least in mint and proof sets. 101 years on the coin would be nice.
<< <i>What the mint really needs to do is to mount a campaign to get people to turn in their accumulations of cents and get them back into circulation. The number of cents in millions and millions of small hoards must be staggering. >>
I can easily imagine this... a conference room at the US Mint, with representatives from Marketing, Production, Accounting and Public Affairs present. Topic: What to do about the cent?
Production: People, we can hardly keep up with the demand for cents. About half of our entire production goes into them and it's likely to grow as a percentage of our overall production, since mintage of other denominations is dropping.
Accounting: It's worse than that! We aren't making any money on them because the cost of manufacturing a cent is already equal to its face value! So we are only breaking even on half of our entire output.
Marketing: Calm down, folks. There's a way to increase our profits. I have a letter here from Al H. who suggests we only sell them to collectors. My figures show that we could sell rolls for $4.95 and bags of 1,000 for $19.95. Our seigniorage on cents would skyrocket!
PA: And to make up for the lost output, we can pay my cousin's ad agency to launch a national campaign asking people to be patriotic and turn in their accumulated cents! I can see it now - Help us reduce the deficit, bring in your old cents!
Accounting: The savings would only be on a percentage basis, slick. In total dollars, it wouldn't amount to $100,000. And there would be an overall drop of 45% in Mint output. A lot of jobs would be lost. Who thinks that is a good idea?
Production: Ooh, good point. My brother-in-law might lose his job and want to move back in with us.
PA: Your brother-in-law works here? What does he do?
Production: Just got hired as a Junior Waffler. Even he couldn't screw that up.
New collectors, please educate yourself before spending money on coins; there are people who believe that using numismatic knowledge to rip the naïve is what this hobby is all about.
As for whether they cease production of the cent, I couldn't care less. Kinda odd coming from me, eh? Truth is, all the cents worth collecting have already been made. The new crap they are coming out with is unimpressive at best.
Sales tax - they do have quarter and half cent tax increases, and for purchases less than a dollar it would have no effect on pricing. Consider a $100 purchase...they don't need a nickel increase in tax to collect more on a quarter of a percent of $100, eh? The math is flawed in stating that cent increases would be obliterated with the elimination of the cent coin.
Circulation - the idea that they would remain in circulation for a long time to come is a myth. Out of the billions of cents made each year, many of them end up in gutters, parking lots, back-seats, under floor mats, etc. Many more get a scratch that exposes the sinc core, and this spells quick doom. They rot within ten years. Cents that are dropped in water or rained on are also doomed. Still yet others end up in jars and water bottles as decorative pieces. Truth here is, every few years you'll hear of bank shortages of cents because they are required to be given in change, yet very few people spend them back. Something costs 59 cents and 99% of people will not consider reaching for two quarters, a nickel, and four cents. It's much easier to give either two quarters and a dime or just a dollar bill for such a purchase.
History and historic sake - the cent has already had a 95 year run, more than any circulating coin from the U.S. and more than most coin series from most countries. Historically it has had value, but it does no longer. Cents are just about completely worthless, and extending the run to 100 years JUST for the sake of doing so would cost us taxpayers a bundle, and the vast majority would rather the tax money went into some congressman's pocket. Realistically, the treasury and the mint rarely do anything out of sentiment, and keeping the cent around for another five years just to do so would be purely sentimental.
Collectors' value - there would be nothing lost and a lot to gain by collectors from the end of the cent's reign. Finally there would be a finite set to collect, and we could close out the books and albums and start treating the cent, especially the Memorial cent, as a "historic coin" instead of a red headed stepchild (pun intended). More collectors than not would benefit from and like a move like this. It wouldn't hurt the mint to go to mint set and proof set production on these, and in fact, they would benefit greatly from it. There are far more cent collectors than Kennedy half dollar collectors, and the revenue generated by selling the cent in sets and rolls at a profit like they do the half dollar would be astronomical.
In closing - The government will keep producing the cent for many more years because it simply doesn't make sense. They are good at that. They will continue to make them even at a loss - with a deficit in the trillions of dollars, I doubt they are concerned with a few million dollars a year lost in not having to make a decision as crucial as getting rid of our smallest base unit and finding some other way to handle commerce.
The Lincoln cent store:
http://www.lincolncent.com
My numismatic art work:
http://www.cdaughtrey.com
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If you've owned it!
If you own it now!
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"Zero affect"? I think not.
Glenn
Edited to add: Another fun thread from Keets.
Sometimes it fun causing trouble!
due to its tiny value and high production and handling costs. It's also little more than a ghost
of its former self in terms of importance or wearability and weight, but it is still collectible and
eliminating the cent from production would quickly high light this.
The mint could realign its resourses with the elimination of the cent. Vast productive and human
resourses would be freed up and total costs would plummet as "profits" were barely affected.
Relief could be restored to coins as the presses were slowed and the die shops were able to
make more dies for the other coins remaining in circulation. The US could have coins which are
better made and more attractive. Employment at the mint would not necessarily drop and might
actually increase for a while.
Increased copper prices alone may not doom the cent because those copper coins remaining in
circulation are no longer so numerous and the mint could easily ramp up production to replace
them, but zinc prices are also increasing and the costs to mint this coin are already high. There
may be political pressure to maintain this wasteful coin even after the cost of minting it becomes
much higher.
Glenn
It is slightly fearful that they will accept the pennies and make them at a loss and make all the other coins out of nickel with zinc cores so that they come out better overall. This thought sickens me......
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at my job (rite aid ) i have learned that its easier to give back a $2 bill instead of a $1 bill when its 2 or 4 dollars in change. i think the idea of 2 cent coin would be alot better instead of all these damn soft strike penniesd that wear fast. just one mans opinion here but bring back the 2 center
Whatever they do I hope that in 2009 they don't make a bunch of goofy circulating commems. Just let the Lincoln design drop with dignity
and the honor of being the longest circulating design. They really should stop it in 2008 so it's an even 100 year circulation.
enough already, the rounding issue is a bunch of BS----no offense intended. it would go down to 5 from seven just as often as it would go up to 10 from eight, on average. and if prices increased it would be a one time happening. there is really no sound, logical, defensible reason to continue producing the Lincoln Cent, which is precisely why it will be made ad nauseum!!!!
now, please, no disturbances. i have a letter to write.
Dear Henrietta,
My name is Al H., perhaps you've heard of me...........................
al h.
<< <i>
now, please, no disturbances. i have a letter to write.
Dear Henrietta,
My name is Al H., perhaps you've heard of me...........................
al h.
If you need to just drop my name and I'm sure you'll get more response.
<< <i>Lincoln Cent------the end is near!!! >>
If the Mint ceases making Lincoln Cents because of cost, the Mint will just buy cheap alloy cents from China. They might even have Mao's portrait on them instead of Lincoln's.
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<< <i>Lets just talk about gas taxes. That's charged by the gallon. So instead of paying an est. 37 cents tax per gallon I'll be paying 40 cents tax per gallon(much more or less in each state). >>
Stop right there. Why do you think this would be so? Only the cent coin would be eliminated, not the cent denomination. I doubt your gas taxes are exactly 37c/gallon. All of the taxes and other surcharges would remain the same, denominated down to whatever detail the State enacts. Only the total is rounded to the nickel.
Examples:
Let's say gas is $1.549 per gallon. Gas taxes and sales taxes are already rolled up into gas prices, but if we wanted to we could back out the calculations and see what a gallon of gas really costs. Most of the modern gas pumps measure gas to the thousandth of a gallon.
First time to the pump you buy 15.191 gallons of gas at $1.59/gallon. This comes to $23.530859, but it gets rounded to the nearest cent, so you pay $23.53. Why do we round to the cent? Because it doesn't make sense to have tenth-cents (mills), hundredth-cents, thousandth-cents, and so on.
Same transaction, but with cent coin elimination. Your total now gets rounded to the nearest nickel, or $23.55. A-ha! you say -- you're paying two cents more, and those cents will add up over the year.
But then the next time you buy gas, you buy 14.604 gallons. Your total is $22.621596. If we were still doing cent rounding, you would pay $22.62, but we've moved on and are now doing nickel-rounding: you now pay $22.60. Two cents less than with cent rounding!
See, that's it really -- over time, through the randomness of transactions, you will end up rounding up as much as you do down -- and therefore, rounding to a nickel will have *zero* effect on the prices we pay for goods and services.
If they lowered the relief on the Lincoln any more, they might as well just draw the design on. I don't care what they do with the cent, but I want to see the mint put out a Silver Dollar sized commemorative minted in copper with the exact same design as the wheat cent - only leaving the date off and noting 1809-2009 in the legend.
The mint will totally foul this up, though, and put out some crappy, awkward, 3/4 face design with an ultra-busy reverse.
2 Cam-Slams!
1 Russ POTD!
<< <i>If they lowered the relief on the Lincoln any more, they might as well just draw the design on. I don't care what they do with the cent, but I want to see the mint put out a Silver Dollar sized commemorative minted in copper with the exact same design as the wheat cent - only leaving the date off and noting 1809-2009 in the legend. >>
How about pure copper, and sized the same as the old large cents -- with the "One Cent" denomination, of course.
If I were pope o' the mint, I would continue to mint cents up to 2008. Then, a special pure copper large cent Lincoln bicentennial commemorative in 2009. And then no more.
Registry 1909-1958 Proof Lincolns