The official blog of the Libertarian Party
December 14, 2006
Your "Two Cents Worth" Increases in Value
While various government reports continue to indicate that our economy is in great shape, a new U.S. Mint policy indicates that the value of the dollar, or to be more precise, nickel, isn't as high as they might suggest. From CNN:
The U.S. Mint has implemented a law against melting down pennies and nickels which, at current metal prices, could be worth more as metal than as currency.
The Mint has received numerous questions over the past several months regarding the metal value of the coins and the legality of melting them.
"We are taking this action because the nation needs its coinage for commerce," said Director Ed Moy in a statement.
"We don't want to see our pennies and nickels melted down so a few individuals can take advantage of the American taxpayer. Replacing these coins would be an enormous cost to taxpayers."
The new regulations authorize a fine of up to $10,000, or imprisonment of up to five years, or both, against violators.
Posted by Stephen Gordon at December 14, 2006 01:54 PM
Reader Comments:
Let me get this straight. I can throw my pennies in a well to be gone forever but I can't, for all intents and purposes, SELL one cent for two? The hits just keep coming.
Wouldn't it be smarter to create pennies for LESS than a cent? If the Mint were smart, instead of making a stupid, impossible-to-enforce rule, they would replace existing pennies with ones worth less than a penny and melt down the old ones for resale.
Of course, at the same time, the Mint is attempting to shut down suppliers of REAL silver and gold currency (which bear face values that are above the value of the precious metal content, so as to encourage circulation and discourage meltdown): the Liberty Dollar.
As long as they are going to assert a monopoly on money (monopoly money?), I think the government would do well to introduce "New Dollars" (and related bills and coins), which would be worth 10 times the value of today's corresponding currency. A penny would once again be worth something, as would a dollar. Whatever inconvenience we would endure in the switchover would serve to fuel a determination to keep the lid on inflation, so we wouldn't have to make a similar adjustment for another hundred years, or more.
I know this sounds stupid, because it would imply they listen, but we seriously need to write our congressmen and senators. This is just ridiculous that we can't do what we please with our own money. And this isn't even a tax!
Think about it. If the LP combined all our pennies and nickels and melted them down for profit we could finance our candidates with it. But, let's not tell them that. First we need them to repeal the law so our money is worth something.
Wait a second, is it even Constitutional for the Mint to make any laws arbitrarily? How 'bout they concentrate on making money that has real value?
How about removing pennies and nickles from the money system? Why do we need denominations that low? For that matter, why do we even need dimes? When was the last time you actually bought something for a penny, nickle, or dime? When was the last time you used a penny, nickle, or dime as exact change for something?
Once removed from the money system, we could then begin melting down every penny and nickle and increase our wealth.
This sounds like a new plank/issue for the LP to stand for - reform our money system. I'm all for any reformation of the money system that makes it more basic in denomination AND increases our wealth!
On another note, I just took a look at the link in Mitch's post. I found this:
"The United States Mint is soliciting public comment on the interim rule, which is being published in the Federal Register."
I recommend taking this offer up.
I plan to suggest that when there is a problem, a better course of action might be to solve the problem instead of doing what most government does when there is a potential problem - forbid us from doing it.
Solution: I don't really think there is a problem. The solution is in the so-called problem. If pennies and nickles are worth more as copper and nickle, let's make it so!
Revise the money system and take those two denominations out of the system and allow everyone to do what they can to have them melted, making the system more basic in denomination and increasing everyone's wealth.
The government itself could do this with what pennies and nickles it has and the result of that increased wealth could be reflected in a tax decrease.
Let me save you some time, folks:
"Those interested in providing comments to the United States Mint regarding this interim rule must submit them in writing to the Office of Chief Counsel, United States Mint, 801 9th Street, N.W., Washington D.C. 20220, by January 14, 2007."
Time to break out your old pen and paper everybody!
Keep this in mind too:
"The United States Mint will make public all comments it receives regarding this interim rule, and may not consider confidential any information contained in comments."
It would be great if we had enough time to pool our suggestions and come up with a unified message that everyone could send in; that would be an opportunity for Libertarians to grab some spotlight and possibly make some change (pun intended)!
Chances are, however, that most people in this forum are going to have similar suggestions anyway.
In the end, I think this is an important issue and one that we should not miss out on. It's a topic worth bringing up in other forums as well, or anywhere else you can think of, and get as many people on board with this as possible.
Dennis, your second point is right on. Melt them down so we can get the value out of them.
The bigger problem lies in that they have lost their value because of inflation due to a number of factors, including but not limited to unnecessary regulations, the Fed, and debt. Competition has been replaced by protectionism and regulations that have backfired heinously.
You used to be able to buy something with a penny or nickel or dime. If we were allowed to melt them down their value would actually increase. My two cents would be worth four and then pennies would be a commodity worth trading.
I've been speaking with others about this in other locations of the net. I've also found a link to take a closer look at what the coins are worth in metal value: http://www.coinflation.com/
Before 1982, the price of the copper in a penny is actually worth .02, as opposed to the .01 it is worth as a penny. That is pretty signifigant, I think ($5,000 is then worth $10,000, and so on). After 1982, the penny is supposed to be about 97% zinc, I believe, and therefore not worth melthing for copper value at all.
One point to mention, however, is that I have heard the cost to melt the penny knocks .01 of that .02 pre-1982 worth of value of the copper in a penny, bringing the worth back to where we started, .01.
I haven't been able to find any proof of this. Does anyone else know?
Just on the basis of achieving a proper "human scale," I think it makes sense for a dollar to represent significant value, with a hundred dollars being "big money" (relative to most normal, everyday transactions) and "pocket change" -- fractions of the dollar from $0.01 to $0.99 being capable of purchasing a wide variety of necessities and impulse items during one's ordinary day. People get intimidated and confused by working with numbers that are too big or too small. The range $0.01 to $100.00 has proven itself to be very comfortable for people over the centuries, and it would be nice to be able to continue to conduct most transactions within that well-established "comfort zone."
Eliminating the penny and nickel is just surrendering to inflation. If you keep doing that, eventually the smallest coin we'll have in our pockets will say "one-hundred dollars," and we'll be talking about eliminating THAT, too.
I don't think the right solution is to get rid of those low-denomination coins, but rather to replace or remint them after adjusting the value of the dollar, followed by a concerted effort to quash inflation.
Given that we wouldn't need as much cash change in the coming era, owing to so many transactions being electronic, perhaps "SuperDollar" coins (based on a new dollar that would be worth ten present dollars) could go back to being copper and silver.
Another possibility is to just replace coins with a different material. How about aluminum? Ha-ha.
The Mint actually make more money the fewer coins are in circulation as that creates a greater demand for new coins, so I don't understand this rule, unless they are the ones actively buying back older coins worth more then melting them down themselves and reissuing the coins with a less costly metal composition.
Is there really a shortage in coins? I've never not been able to get change when I pay cash and aren't most people paying with credit or debit cards now anyway?
I guess I could help by making wishes with Canadian coins from now on.
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Let me get this straight. I can throw my pennies in a well to be gone forever but I can't, for all intents and purposes, SELL one cent for two? The hits just keep coming.
Posted by: Nick at December 14, 2006 11:07 PM