Tuesday, March 25, 2008

Keeping Currency Current

Matt Yglesias thinks we should get rid of the penny. And of course we should. But as commenter "pseudonymous in nc," uh, notes, that's really too little, too late.

The whole point of having both paper and metal currency in circulation is that small denominations that get used in most everyday transactions are durable and easy to tell apart (coins), while large denominations can be carried around without resorting to a forklift (paper notes). Bills should be used to pay rent, or your taxes, or to make big purchases, while a couple coins should suffice for buying coffee or lunch or movie tickets.

Not only is this currently not the case, but we're not really even anywhere close to this ideal. Almost nothing costs less than a dollar (at least in the city), and the only widely circulating coins much worth paying attention to are quarters, but only because you need them for parking meters and laundromats.

I propose doing away with the penny, nickel, and dime entirely: the quarter dollar (the ha'penny of tomorrow) would be the new lowest denomination coin, and we can keep the Sacajawea (or whatever the current dollar-coin iteration is). To that we'd add $2, $5, $10, and $20 coins. People are used to getting twenties out of the ATM machine, so we can start the paper currency there for the time being, also preserving the fifty- and hundred-spot notes and adding new bills for $200, $500, and $1000.

So nobody gets mad about anyone currently featured on a coin or bill being disappeared down the memory hole, we could just carry them over to the new denominations. Lincoln, Jefferson, and FDR would be on the $5, $10, and $20 coins, respectively; Washington, Lincoln, and Hamilton would be on the $200, $500, and $1000 notes; and whoever is currently featured on the $2 bill would go on the new American Toony coin.

Since the $100 bill will remain unchanged, no rap lyrics that reference "benjamins" need be updated. Everyone's happy.

Update: Here are some mockups. I also forgot about the half dollar, which I guess we may as well preserve.

Improved coin denominations

Improved note denominations

1 comment:

DU said...

Expect blowback from the wallet industry.