6 ms·

Are we pretending that nobody has ever tried phasing out smaller denomination currency, and that we don’t have a vast body of actual case studies to draw from?

Are we pretending that nobody has ever tried phasing out smaller denomination currency, and that we don’t have a vast body of actual case studies to draw from? Why are we running thought experiments at all?

jacobgkau 11mo ago
As others have pointed out, governments sometimes issue actual guidance on how it's supposed to work when they phase out currency. It's not always "just stop making them and see how the market deals with it."
- water9 11mo ago
  It makes no sense to spend more money to mint the actual money, then the money is worth OK. You might not like it, but something has to be done because to continue in a slow and methodical process 1) forgets that the government is the same entity that runs the DMV 2) people love to throw out criticisms of solutions that aren’t perfect not realizing that it’s still better than the status quo. To do nothing is costing money or in the case of Ukraine it’s costing lives. 3) I bet you $100 You don’t like Trump.
  - jacobgkau 11mo ago
    > 3) I bet you $100 You don’t like Trump. I actually like Trump (or at least his presidency) a lot more than I think most Hacker News browsers do. I like Trump's presidency more than most of my co-workers and many of my friends do. My arguments in this thread are entirely my own, not the product of some political allegiance.
  - hn_acc1 11mo ago
    1) DMV is state-run, not federal govt. 2) Why can't we at least spend 5 minutes studying how it went in Canada, and learn that govt guidance was helpful to the transition, so do that too? 3) Sure. And even more because, even when he DOES pick up on a good idea (I support elimination of the penny), he does so in a haphazard / slipshod way that the end result is often worse than if nothing had been done.
- xienze 11mo ago
  > It's not always "just stop making them and see how the market deals with it." On the other hand, we’ve been delaying this inevitable and necessary action for decades over hand-wringing about the implications of rounding up or down by a maximum of two damn cents per transactions _for decades_. If we did it “the right way” I’m sure it would take years and years and cost millions of dollars to “study the effects” of eliminating the penny. Just do it already. Even with the best plan in the world people are going to whine about rounding.
dragonwriter 11mo ago
Americans like to pretend that history and the experience of the rest of the world doesn't exist and that things that large numbers of other countries have done successfully (and which even the US has done in the past, in this case, as the half-penny, after all, was phase out a long time ago) are impossible to do successfully.
- jandrewrogers 11mo ago
  Sales taxes as they are known in the US were largely introduced in the 20th century. The half-penny was phased out in the mid-19th century. The legal structure of sales taxes in the US present some unique challenges that simply don't exist as problems that needed to be solved in other countries. These problems can't be legislated away because the authority to do so is highly decentralized. Pretending that these problems don't exist because they don't exist elsewhere is not helpful. This is very much a case of the Mencken quote that for every complex problem there is a solution that is simple, obvious, and wrong.
  - pyth0 11mo ago
    Can you explain further? Canada has sales tax and successfully phased out the penny.
    - dpark 11mo ago
      No! The US is totally different from Canada. We cannot learn from anyone else’s success because we are a unique snowflake.
    - jandrewrogers 11mo ago
      Sales taxes in the US are truly and insanely decentralized. The US has thousands of independent sales tax authorities with their own laws and regulations about how sales tax must be computed and displayed. These jurisdictions overlap, the sales tax you pay may be the aggregate of multiple different sales tax authorities between which there is no coordination. Rounding to the nearest 5c or whatever creates a situation where in many locales it would be impossible to comply with sales tax and pricing laws because different tax authorities requiring mutually exclusive ways of making this change. This creates an obvious need to change the law. This is not trivial because they are often written into statute or constrained by constitutional processes. It requires thousands of jurisdictions to all change their laws at the same time in the same way, which is effectively impossible. Even if it weren't the process would require several years. In many locales it requires a democratic vote -- what if the voters vote against it? Courts aren't going to let the government ignore these requirements because it would be inconvenient. It really is a "herding cats" problem. There are many other things in the US that effectively can't be changed because there is no central authority to overcome coordination problems by fiat. Even at the level of all 50 States, resolving these kinds of coordination problems typically takes several decades.

jacobgkau 11mo ago

As others have pointed out, governments sometimes issue actual guidance on how it's supposed to work when they phase out currency. It's not always "just stop making them and see how the market deals with it."

water9 11mo ago
It makes no sense to spend more money to mint the actual money, then the money is worth OK. You might not like it, but something has to be done because to continue in a slow and methodical process 1) forgets that the government is the same entity that runs the DMV 2) people love to throw out criticisms of solutions that aren’t perfect not realizing that it’s still better than the status quo. To do nothing is costing money or in the case of Ukraine it’s costing lives. 3) I bet you $100 You don’t like Trump.
- jacobgkau 11mo ago
  > 3) I bet you $100 You don’t like Trump. I actually like Trump (or at least his presidency) a lot more than I think most Hacker News browsers do. I like Trump's presidency more than most of my co-workers and many of my friends do. My arguments in this thread are entirely my own, not the product of some political allegiance.
- hn_acc1 11mo ago
  1) DMV is state-run, not federal govt. 2) Why can't we at least spend 5 minutes studying how it went in Canada, and learn that govt guidance was helpful to the transition, so do that too? 3) Sure. And even more because, even when he DOES pick up on a good idea (I support elimination of the penny), he does so in a haphazard / slipshod way that the end result is often worse than if nothing had been done.
xienze 11mo ago
> It's not always "just stop making them and see how the market deals with it." On the other hand, we’ve been delaying this inevitable and necessary action for decades over hand-wringing about the implications of rounding up or down by a maximum of two damn cents per transactions _for decades_. If we did it “the right way” I’m sure it would take years and years and cost millions of dollars to “study the effects” of eliminating the penny. Just do it already. Even with the best plan in the world people are going to whine about rounding.

dragonwriter 11mo ago

Americans like to pretend that history and the experience of the rest of the world doesn't exist and that things that large numbers of other countries have done successfully (and which even the US has done in the past, in this case, as the half-penny, after all, was phase out a long time ago) are impossible to do successfully.

jandrewrogers 11mo ago
Sales taxes as they are known in the US were largely introduced in the 20th century. The half-penny was phased out in the mid-19th century. The legal structure of sales taxes in the US present some unique challenges that simply don't exist as problems that needed to be solved in other countries. These problems can't be legislated away because the authority to do so is highly decentralized. Pretending that these problems don't exist because they don't exist elsewhere is not helpful. This is very much a case of the Mencken quote that for every complex problem there is a solution that is simple, obvious, and wrong.
- pyth0 11mo ago
  Can you explain further? Canada has sales tax and successfully phased out the penny.
  - dpark 11mo ago
    No! The US is totally different from Canada. We cannot learn from anyone else’s success because we are a unique snowflake.
  - jandrewrogers 11mo ago
    Sales taxes in the US are truly and insanely decentralized. The US has thousands of independent sales tax authorities with their own laws and regulations about how sales tax must be computed and displayed. These jurisdictions overlap, the sales tax you pay may be the aggregate of multiple different sales tax authorities between which there is no coordination. Rounding to the nearest 5c or whatever creates a situation where in many locales it would be impossible to comply with sales tax and pricing laws because different tax authorities requiring mutually exclusive ways of making this change. This creates an obvious need to change the law. This is not trivial because they are often written into statute or constrained by constitutional processes. It requires thousands of jurisdictions to all change their laws at the same time in the same way, which is effectively impossible. Even if it weren't the process would require several years. In many locales it requires a democratic vote -- what if the voters vote against it? Courts aren't going to let the government ignore these requirements because it would be inconvenient. It really is a "herding cats" problem. There are many other things in the US that effectively can't be changed because there is no central authority to overcome coordination problems by fiat. Even at the level of all 50 States, resolving these kinds of coordination problems typically takes several decades.