I hadn’t intended to bring these home. I just couldn’t get rid of them.
I hadn’t tweeted in I don’t know how long, and I had forgotten how Musk had screwed things up.
I got a notification about a story in The New York Times magazine, and used the link to write this reaction:
You’re right. We shouldn’t spend millions minting the silly things. Or, for that matter, nickels, dimes or quarters. Or printing paper money. What do we need cash for anymore?
Before Musk screwed with Twitter, that would have appeared above the headline with an image from the story. Since that no longer happens, I looked and saw that my reaction would make no sense. So I’m writing this post.
What I was reacting to was this:
America Must Free Itself
from the Tyranny of the Penny
The piece begins:
I was disappointed to learn, recently, that the United States has created for itself a logistical problem so stupendously stupid, one cannot help wondering if it is wise to continue to allow this nation to supervise the design of its own holiday postage stamps, let alone preside over the administration of an extensive Interstate highway system or nuclear arsenal. It’s the dumbest thing I ever heard. I have come to think of it as the Perpetual Penny Paradox.
Most pennies produced by the U.S. Mint are given out as change but never spent; this creates an incessant demand for new pennies to replace them, so that cash transactions that necessitate pennies (i.e., any concluding with a sum whose final digit is 1, 2, 3, 4, 6, 7, 8 or 9) can be settled. Because these replacement pennies will themselves not be spent, they will need to be replaced with new pennies that will also not be spent, and so will have to be replaced with new pennies that will not be spent, which will have to be replaced by new pennies (that will not be spent, and so will have to be replaced). In other words, we keep minting pennies because no one uses the pennies we mint.
A conservative estimate holds that there are 240 billion pennies lying around the United States — about 724 ($7.24) for every man, woman and child there residing, and enough to hand two pennies to every bewildered human born since the dawn of man….
And so forth. You get the idea. Pennies are a huge waste; you’ll get no argument from me.
But what about other forms of cash?
I used to carry small amounts of cash in my wallet, 20 bucks or less at a time. Since COVID, I haven’t even done that. The only cash I regularly need is a quarter — one quarter — to pay for a shopping cart each time I go to Aldi. But when you put the cart back, you get your quarter right back out of the slot attached to the handle. One quarter, used over and over. (The system seems to work. The carts are in better condition than those at most stores. Ze Germans are clever…)
Sure, I know other needs arise — such as when you do business with someone seeking to avoid taxes. But that sounds like the stupidest reason in the world. Why should the government spend millions — nay, billions — to produce something that abets tax evasion?
I also realize that a lot of poor folks don’t have bank accounts, or debit cards or anything of that kind. But can’t that be worked around? Don’t the cards that have replaced food “stamps” suggest a way to address that need?
Of course, that means everyone would have to be more fully in “the system,” which might offend the sensibilities of our libertarian friends and neighbors. But why would a libertarian, of all people, want the government to waste his tax money on something as wasteful and inefficient as cash?
And if you understand the history of money — going back all the way to King Croesus of Lydia, who developed the very first standardized gold coins — the whole idea of money that everyone would accept (which is what makes it “money,” rather than, say, barter) was that the government issued it, granting something close to universal legitimacy. Back in the 6th century B.C., coins demonstrated that by having the king’s image on the “heads” size. Or, today, George Washington’s. Or the queen’s. And I saw some with King Charles on them in England this summer.
(This is why you see some libertarian fantasists today going for Bitcoin. Which indicates that they don’t fully understand what money is, and how you make sure it has lasting value.)
So why not some nice, neutral electronic credits instead? Oh, we could call them “dollars” if you like. We already do, with our bank accounts and debit and credit cards. Remember, only about a tenth of the real-life money we spend in today’s world is backed up by actual, physical coins and banknotes. This in no way inhibits commerce. Ask Jeff Bezos.
In fact, we’re not far from cash becoming passé. Europe is ahead of us on that, though. I had a terrible time getting anyone in Amsterdam to accept Euros. I came back with 50 euro or so in my wallet, and I had not meant to. I just couldn’t unload them. Dutch merchants generally wouldn’t accept contant geld; they preferred my debit card from Palmetto Citizens, and they particularly liked my Target credit card, which has tap capability. They’re really into tap over there.
A few days before, I’d had little trouble getting the English to take pounds. But in Amsterdam, forget about it.
So how long do you think we’re going to be minting and printing and in many cases carrying around these filthy things?
And how long should we?
