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Cut costs: No bills larger than $20; keep only quarters

Bill Roberts

There are two monetary proposals (not original to me) that could save the federal government millions of dollars. One sounds good but is a matter of which I have no firsthand knowledge. The other, however, involves a phenomenon I have personally experienced: People really do not sweat the small stuff.

The first idea is simple. The government could announce that after a given date, the Federal Reserve will no longer honor any bill larger than $20.

It is said there are more dollars in circulation as $100 bills than any other denomination and that much – most? – of that is held out of the country. It is money from drugs and other nefarious activities. Making all that nonnegotiable after a specified date would cause it to come flooding back into the country. It could then be tracked, counted and in some cases perhaps even seized.

Again, it sounds good, but – despite growing up in the 1960s – I have no personal knowledge of the drug business. I can say from experience that the second idea would work: Quit making all coins other than quarters.

There would be an initial effect on inflation as everybody rounded up their prices. Coin collectors and numismatists might object. And those my age or worse might howl, just out of memory from when coins would buy something. When I graduated from high school, four dimes would get you a gallon of gas – and change.

But any controversy would quickly fade. People just would not care. And the government would save money. It now costs more than 2 cents to make a penny and 8.5 cents to create a nickel. Other coins cost less than their face value – it is called seignorage – but we should keep quarters and, except for making change, both dimes and half-dollars are functionally useless.

The first half of my working life was in restaurants. In Durango, that was mostly at the old Sweeney’s and while there, I was mostly waiting tables.

On any given night, we would have three waiters, three guys in their 20s or early 30s. (And in those days, they were all guys.) All three would be running checks and using an old cash register that could not compute sales tax. We did not even have the chart for figuring tax that used to be common. We just made it up.

Technically, we did the math in our heads. And we were all of a pre-cellphone generation that was actually taught arithmetic. But how many people could do that accurately?

Here is how it would work: Suppose the tab is $85.50. Sales tax in Durango is currently 8.4%. Well, 8x8=64 and 9x9=81, so the tax is going to be between $6.40 and $8.10. I would typically round it off to a nearby quarter, so call it $7 or $7.25. My phone says the actual amount would be $7.18, so that would be either giving the customer 18 cents or dinging the table for 7 cents.

Either way, nobody cared. We were not cheating anyone. We might round it up or down. And while that might work out to slightly off exact tax on a given bill, overall, it proved surprisingly accurate.

The point is simply that after the initial change, nobody would even notice – let alone care – that everything was rounded off to a quarter.

In my years in restaurants, I heard lots of complaints about lots of things. But in something like a decade of waiting tables full time, I did not get a single complaint about sales tax.

Keep quarters and end the other coins. Nobody will care.

Bill Roberts was a former Opinion Editor for The Durango Herald from 1997 to 2017.