Sounds Good to Me

I'm not sure I agree about the $20 but yes, the main use of the $100 and $50 bills are illegal (tax evasion and illicit purchases/sales).  So drop them.  Of course if we're going to start changing up our money system we should also drop the $1 bill in favor of $1 coins and start minting $2 coins, drop the useless penny and really drop the almost as useless (and also money losing) nickel (note the only multiples of 5 cents that can't be made without a nickel are $0.05 and $0.15).

A part I thought was interesting that I would guess most people aren't aware of was when Rogoff said:

The tax evaders are at the upper part of the income distribution. Payment recipients, like cleaners, don’t owe taxes. And if they’re paid under the table, then when they reach retirement age and try to get their Social Security, there isn't any.

The general understanding of immigrants taking jobs, being paid under the table and not paying into the system is really a case of employers cheating the tax system.  Bringing undocumented immigrants out of the shadows, will help prevent this possibility.  I would guess that it would do a better job than abolishing the $100 and $50 would.

Incidentally after that statement the next back and forth was somewhat nonsensical (going from 2% to 4% inflation target would confuse people but negative interest is perfectly sensible?!?).  I think both issues would actually be solved by NGDP level targeting (say 5%) that doesn't have the inflation only "confusion" (which is really banker hysteria) or the goofiness of negative interest.

Kill the Penny (and Nickel)

I know most people don't really care, but this shouldn't be difficult.  The continued existence of the penny is purely the result of lobbying by the only group (industry) that profits.  Everyone else loses and legislators should fix it. Maybe Elizabeth Warren can champion the issue in the senate?

Then we can kill the nickel and dollar bill and start minting $1 and $2 coins like a civilized nation.

Not Doing it Right

I like coins, and keep a lazy person's collection (those I've gotten as change and think are cool), so at some level I'd be a little stoked to see a brown nickel (I'm guessing copper).  Really though, we should kill the nickel (along with the penny), up production of $1 coins and add $2 coins.

Coins and Bills

In the face of the manufactured crisis that is the austerity bomb, it looks like at least a few people are hoping to convince Congress to switch our $1 cash form from a bill to a coin.  I am wholly in support, of course (I also think we should add a $2 coin to the mix, the combination would mean this article is crap, as seigniorage would be much greater, and usage of the $2 would be likely higher than the $1).

Really, though, if someone wants to argue for making/saving money with the mint the most obvious solution is to stop minting the penny, and even more so, the nickel.  Both of those cost more to make than the face value.  If we stopped making them we would save money.

There are weak, but understandable arguments for keeping the $1 bill--I disagree with them but they exist--the arguments against killing the penny on the other hand (or the nickel, but you hear more about ending the penny) are some combination of paranoid, and/or stupid (I was going to add selfish, but those are pretty much also stupid).

US Currency

Just about every time I travel abroad I am reminded of how stupid our currency setup is here.  I got back from Israel recently.  The smallest denomination coin: 1 NIS (~US$0.26), the largest: 10 NIS (~$2.60).  The smallest denomination bill: 20 NIS (~$5.20).  Also, the bills are made of plastic, not paper.

We have a bizarre sentimental attachment to pennies and dollar bills here.  It makes no fucking sense, and people get strangely paranoid when someone suggests getting rid of them. ("If we got rid of pennies, the poor making cash purchases would be screwed over by businesses!")

We should abolish the penny, the nickel, and the dollar bill, up the minting of $1 coins and add a $2 coin.  We should at least switch the bill material to plastic, which is much longer lasting and possibly a bit harder for forgers to reproduce.  Of course all these things make financial sense so there's a good chance Republicans are more opposed than Democrats, but the real blame on this lies with average citizens.

Pennies, Pennies Everywhere

Except in Canada, where sense has prevailed. Yes we should lose the penny (and the nickle and the dollar bill) and no, it probably wouldn't hurt the poor as this states. A couple reasons: one is that the $x.99 would, if it does change, go to $x.95, for the same reason it is currently $.99, and the other reason is more of a savvy business notion one. If a business rounds down, that may encourage cash purchases, which net them more profit since they don't have to pay the credit/debit card transaction fee.

Bills and Coins

Stories like this make me mostly happy. It makes lots of sense to scrap dollar bills, pennies and nickles, and to mint $1 (and probably $2) coins. The arguments against mostly run the gambit from inane to stupid: "It's always been there, it's reliable, it's a symbol of our nation's history, it's a symbol of our nation's economic strength." Really? Printing paper $1 bills is a symbol of economic strength? How, exactly?

About the closest thing to a sound argument is an odd one: we are in the midst of the lesser depression and printing paper dollars means jobs. Of course, I'm not so sure that it really means more jobs than switching to coins would--especially if we were to add a $2 coin along with killing the paper $1's--but since it's saving the government money, it probably means fewer jobs, which may not be able to be absorbed by the rest of our depressed economy.

Also, the congressional back and forth is very parochial politics (mining vs. paper industry) so seems more petty than it should, but that's also the way politics works (well, used to work). Still, the end is right and the means aren't actually bad so may as well support the people working toward this noble goal that is my personal preference :)-

Dollar Coin Problem

So the US has $1.6 billion in dollar coins sitting idle because people don't use them. The solution they are going with is to effectively stop making dollar coins. The proper solution, of course, would be to stop printing dollar bills.

Dollar coins would actually be cheaper in the long run than bills, because even though they cost much more to produce they last much, much longer in circulation. I wish I could find the study but my memory is that a $1 bill has a circulation life of maybe 3 months. A $1 coin would be much more like a quarter (if not longer) at 20 years. So figure at least 80 bills will need to be printed for every 1 coin.

Further, ending $1 bills could be an economic stimulus. Currently there are lots of vending and other machines that are designed to take $1 bills but not $1 coins (many now take both), they would need to be swapped out, which means companies like Coke putting more money into the economy than they need to at present.

Also, for all those worried about strippers and G-string problems: pretty much every civilized nation on the planet uses coins for the rough equivalent of $1 and $2 and they also have strip clubs so it certainly works.

This fits nicely with my End the Nickel (and End the Penny) "campaigns", and thinking back on ending the nickel, the odd thing is that, since we have a $0.25 piece, you there are only two denominations that are excluded with no nickel: $0.05, and $0.15. Any other amount of change can be made with just dimes and quarters...and if someone were really picky, if there is at least $1 available to break even the 5 and 15 cents can be covered. I really like losing the nickel.