A pending Senate recommendation to get rid of the one cent piece (see below) superficially makes sense but is very dangerous and should be resisted.
Why?
Because even if pennies are merely trifles they represent a break point; eliminate them and suddenly the next logical break point is a dime.
Massive inflation followed England's move to the decimal pound and that was, I believe, because the shilling -- formerly a break point -- vanished.
Don't under estimate the value of a symbol -- especially as money is nothing more than a symbol of value!
"The Senate finance committee is set to recommend Tuesday that Canada get rid of the lowly coin.
Sources say the committee has concluded that a century of inflation has eroded the value and usefulness of the one-cent piece.
...
The Bank of Canada has also studied the potential inflationary impact of eliminating the penny and has concluded it would be negligible.
"On some transactions, the merchant loses and the consumer wins; on some, the merchant wins and the consumer loses," Pierre Duguay, the bank's deputy governor, told the Senate finance committee last spring.
"However, on balance it evens out.""
9 comments:
I vote to keep the penny. They can stop making new ones for a few years. There are lots in circulation. Make another batch when needed.
And I guess the Ontario HST will be 15% instead of 13% a great deal of items will go up.
Let's keep it.
Scrap it. They can have my 2 cents worth.
The next logical break point is a nickel (5 cents).
> Massive inflation followed England's move to the decimal pound and that was, I believe, because the shilling -- formerly a break point -- vanished.
I would like to suggest that numerous other factors were involved in this inflation - such as, say, the 1970s oil embargo, which shortly followed the 1971 decimalization of the pound.
It's absurd, I think, to blame 1970s inflation on the decimalization of the pound.
D,
I agree there was far more to it than just moving to decimal pounds -- but I was there and remember the confusion among people and really think it was a major factor.
j
I say put Mulroney's face on the penny ... and then ban it!
I remember stories my grandmother(from Scotland) told me about the move to decimalize the pound. Seniors were swindled during the confusion.
Getting rid of the penny is far less dramatic than all of that.
eg. The British half penny (decimalized) was worth 1/480 of an old pound.The old three Pence piece was then worth 1.25 Pence in the new Stirling pound system;etc.
The issue, aside from the almost worthlessness of the penny, is the cost to produce it. I wonder if a simpler solution would be to resize the penny to something much smaller, hopefully reducing costs.
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