Article I, Section 8, Clause 5 of the U.S. Constitution gives Congress the power to "coin money [and] regulate the value thereof."Back in the old days, the smallest denomination minted was the half-penny. This made sense at the time, since a half-penny could buy things. After 60+ years of inflation, however, it became less valuable, and in 1858 the half-penny went the way of the dodo.
Now there are calls to eliminate the penny. This is nothing new; debate over eliminating the penny has been going on for decades. During that time, the penny has become totally unnecessary. Vending machines don't take them. They cost more than they're worth to produce. And most pennies get removed from circulation almost as quickly as they get minted.
But eliminating the penny isn't quite the right answer.
Remember, Congress can not only coin money, but also regulate its value. In other words, Congress can decide just what a dollar is worth. The answer, then, is to revalue the dollar. Congress should create a new monetary standard, the "new" dollar, equal in value to ten current dollars.
This won't happen overnight, of course. The entire system of coins and bills needs to be redesigned to ensure that there is no confusion between "old" and "new" money. Also, there needs to be a time lag between formal announcement and actual implementation, so everyone - even vending machines - can adjust. But it can be done successfully.
How do I know it can be successful? Witness the introduction of the Euro. It replaced a dozen or so different currencies, all with different values. It created a completely new standard across national borders. Europeans had to deal with a wide variety of odd conversions; all we're doing is moving a decimal.
Sure, we have to redesign all our currency. But the Treasury Department is constantly redesigning currency in an effort to stem the tide of counterfeiting, so this redesign is no big deal for them. Besides, it's about time we came up with new coins. Since 1946, the only new coins have been monumental failures - the Kennedy half-dollar had its day, and that day is past, and the various dollar coins, from the Eisenhower dollar of 1971 to the Susan B. Anthony and Sacagawea dollars have never been accepted.
This brings up another reason to change the value of the dollar. The mint is always trying to introduce larger denomination coins, and always failing. Coins, while initially more expensive to produce, are cheaper in the long run because they last so much longer. But Americans just don't want dollar coins. By resetting the dollar's value, the new "quarter" will be worth $2.50 in today's terms. People will accept them, and the mint saves money.
In addition to the obvious advantages, there are some silly ones.
We've gotten to the point where billionaires are springing up all over the place, and being a millionaire is hardly worth bragging about. Revaluing the dollar will fix that (hey, the super-rich have their problems too, y'know).
How many times have you put a five-dollar bill into a vending machine, only to have it kicked out because of some stupid fold or crease? Then you're hunting around for someone to switch with you because you don't have enough singles and the mindless machine won't take twenties. With the new values, you can use two quarters instead of a five-dollar bill and avoid the hassle. Additionally, you won't have to worry about getting those confusing dollar coins in change; dimes will replace them.
When your kid loses a tooth, you will once again be able to leave a dime under his or her pillow. Seriously, the tooth fairy is going broke. Whenever she gets caught in the rain, her bag of dollar bills gets soaked, and she has to go back and start over, which means overtime for her workers, which costs her a fortune. Give her a break, huh?
Thoughts would be worth more. After all, the new penny would be worth ten old cents. Additionally, the standard would be that much higher for people wanting to put their two cents' worth in. Perhaps the new standard would reduce the amount of worthless chatter. Well, perhaps not.
One more thing - we'll be able to bring back the half-penny.
Copyright 2004, Dan Jacoby
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