should the US consider a currency redenomination?
should the US consider a currency redenomination?
Prices of things are becoming absolutely insane. $800+ rent, $30,000 cars, $10 sub sandwiches, etc. It would be nice to do a 3/1 split and cut everything by 2/3. Then we would have $266 rent, $10,000 cars, and $3.33 sub sandwiches. Wages, debts, everything would drop to 1/3 what they are now. It would also make coins useful again since a vending machine soda would be 2 quarters again.
Why? Seems like a lotta work for not much benefit.
Because numbers are becoming so large its almost pointless to think about. The national debt for example is 33 trillion dollars. That is an unimaginable sum. What even is 33 trillion dollars?
Is this a problem, though? There's currencies like the Yen which have high numbers, the users just adjust their mindset of how much is "a lot". Reducing the numbers wouldn't change the problems of things getting more expensive. This feels like treating a very cosmetic symptom of a much larger problem.
The wealthy would still possess an obscene and unfathomable amount of wealth and the impoverished would still be struggling to get by, just the numbers would be smaller. Does that help anything?
In Korea, 1000₩ is about $1 (USD).
Your rent could be 200,000* units per month. So it's basically a factor of 100, but for cents instead of dollars.
Yet shopping was still a whole lot easier because if the price said 1000₩, you paid 1000₩, no questions asked. Unlike in the US, where your $1.00 coffee gets $0.10 added for tax, $0.25 added for the tip, so even though the menu says $1.00, the actual cost to the customer is $1.35.
The problem isn't that the numbers are big. The problem is that you're trying to think about national numbers from the perspective of an individual.
500 miles might not be far for a pilot, but it would be for a jogger. We don't need to shorten the units to make it easier for the jogger to understand 500 miles. (0.5 kilomiles! Lol)
*EDIT: Fixed the scale. I've been working with Japanese Yen which is a factor of 10, but KRW is a factor of 100 like I said...but mathed wrong. Lol
That is an unimaginable sum. What even is 33 trillion dollars?
How is 11 trillion any better?
If you want to actually bring that to a number people can grasp than small amounts would become impractically small. Like you would need to deal with 0.000001 and 0.0000001 dollars and stuff.
No. Costs rise all the time. Ideally, so does your income, giving you mostly the same purchasing power as before - just because 10 is a larger number than the 8 you paid a year or two ago, doesn't mean you realistically expended more value (e.g. time spent working, or foregoing other things).
Rejiggering this would involve a lot of work. It would not give you any more or less value, it would be cosmetic. It would also be based on a very subjective "this shouldn't cost as much as $X" where both X and the rough value of the $ are... just something you happen to be used to. A trivial example is how this looks to anyone with a different currency, or to an American in a different time.
Now, of course, a large amount of people in the entire Western world have gotten shafted for 50 years plus, and the purchasing power has gotten even worse in the past 5, but that's basically a separate issue.
(Also, coins are pretty expensive compared to paper money, IIRC)
Yeah, incomes have risen a hell of a lot slower than inflation causing the average person to be poorer overall. Redominating the currency would not fix that problem. That is a systemic issue where inflation is higher than wage increases, so people demand higher wages, which then causes inflation to increase, and it's a spiral.
I don't really see a point in doing that. I dislike coins.
I dislike coins too, but mostly because a dollar is the smallest useful denomination and anything below is rounding. In a 1900 era world where you could buy something material for a nickel or dime, it was worthwhile to use those coins.
In the Eurozone, you have 1 and 2 Euro coins, which are super useful all the time for small purchases. I'd really love to see them here too.
I don't think that would work out in the way you think it would. Also, this isn't really personal finance.
It's an interesting idea, but the caveat here will be to do this for all currencies in the world, otherwise the concept of foreign exchange rates would get fucked up.
One of the primary parameters for determining exchange rate between two currencies is to first determine how much the same service/product/lifestyle cost in those two currencies.
Unless you "adjust" both the currencies (and in turn, all the currencies in the world), one currency (or country) would spiral into an economic abyss.
wouldn't the same logic apply. So for example, a euro would be $0.36? That should be easy for computers to handle