In For a Penny, In For a Nickel
In the "It's Crazy, But It Just Might Work" department: Austan Goolsbee reports
on the possibility of the government waving a magic wand and decreeing
that pennies would hereinafter be worth five cents. Before you
laugh and shake your head at yet another divorced-from-reality
article in the New York Times, read it, and also the actually
serious (PDF) article by François R. Velde, an economist
with the Chicago Federal Reserve, in the Chicago Fed Letter.
This is via, appropriately
enough, the Freakonomics
blog. One of the commenters there points to this
guy, who's amassed a million pennies and is at a loss as to what to
do with them. Wouldn't it be neat if
their value went from $10,000 to $50,000 overnight?
I haven't seen it pointed out elsewhere, but adopting
this plan would eliminate a stumbling block
to the introduction of a dollar coin
into everyday commerce, not just as a wacky addon
to ordinary currency: there would be an extra coin cup freed up
in ordinary cash registers across America.
And, of course, the move would also be an educational experience,
as we'd be reminded of what the word "fiat" in "fiat money"
2007-02-03 11:51 AM EDT
Last Modified 2017-12-05 4:46 PM EDT