April 01, 2008
Coins again
Because pennies and nickels now represent negative seignorage (the cost of the coins is greater than their face value) the bad design of US coin denominations is under discussion again. The US has the fewest coin denominations and the lowest-value smallest bill of any developed country known to me (for example; the smallest euro bill is €5 and there are eight euro coins; the dollar bill is worth less than a seventh of €5 and we have four coins in common use). There's a lot of public money to be saved by substituting bills with coins, and killing the penny would free the cash register space needed for dollar coins to stay in circulation.
If you're newly interested in this ongoing history of hobbled policymaking, you can review it in our earlier posts.
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