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.

FartsWithAnAccent ,
@FartsWithAnAccent@kbin.social avatar

I don't think that would work out in the way you think it would. Also, this isn't really personal finance.

amio ,

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)

shortwavesurfer OP ,

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.

walden ,

I don’t really see a point in doing that. I dislike coins.

shortwavesurfer OP ,

But why do you dislike them? Because in this event a coin would actually be worth using, where now it’s just an annoyance.

AnonTwo ,

Does anybody like decimals? Even if you add more worth it's more math.

shortwavesurfer OP ,

That’s true. Have a look at Bitcoin where they are sending satoshis around (0.00000001).

e_t_ Admin ,

I kind of like how the Yen is denominated: all prices are integers. It would be roughly equivalent to pricing everything in cents, but at least there'd be no decimals.

johnjamesautobahn ,

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.

BraveSirZaphod ,
@BraveSirZaphod@kbin.social avatar

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.

DeadNinja ,
@DeadNinja@lemmy.world avatar

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.

shortwavesurfer OP ,

wouldn’t the same logic apply. So for example, a euro would be $0.36? That should be easy for computers to handle

DeadNinja ,
@DeadNinja@lemmy.world avatar

Correct, but only if you can make the European Union to agree to slash the value of 1 Euro from $1.09 as of now, to $0.36 ( what you proposed) - and then get every other currency in the world to follow suit.

Good luck with that.

shortwavesurfer OP ,

The European Union wouldn’t have anything to do with it. The market would, because the dollar would triple in value and therefore the euro would be one-third its value compared to the dollar.

TheAlbatross ,

Why? Seems like a lotta work for not much benefit.

shortwavesurfer OP ,

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?

HerrBeter ,

Ah, my good sir, I believe that 33 trillion dollars is the equivalent of one current US national debt.

shortwavesurfer OP ,

Yes, but a regular individual cannot even fathom 33 trillion dollars. It is a number so large that it’s not understandable.

ares35 ,
@ares35@kbin.social avatar

it's nearly $100,000 per person (man, woman, child.... everyone).

TheAlbatross ,

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?

shortwavesurfer OP ,

Oh, I definitely see your point, and it is very much a psychological thing more than an actual fix.

TheAlbatross ,

Don’t get me wrong, I’d much rather be paying $266 in rent, though if I’m making one third of what I do now, I’m still in the same spot, just… with smaller numbers.

shortwavesurfer OP ,

Right, as I said, it is definitely more psychological than actually helpful, but it would definitely feel a lot better to see smaller numbers. Hell, the national debt is even hard to write. 33,000,000,000,000

TheAlbatross ,

But the national debt is irrelevant to me. It has zero impact on my day to day life. It’s just some imaginary number pundits can shout about to push their utterly disconnected agendas.

Even if I could wrap my head around it, that wouldn’t improve the credit rating of the nation, even if I could manage to care one iota about that.

I’m sorry, I’m just struggling to understand why it’s useful to have a national debt that’s a small enough number for me to visualize some quantification of it.

shortwavesurfer OP ,

True, but as the national debt grows, everything else grows with it, and inflation, and eventually rent would be $10,000 a month.

TheAlbatross ,

Sorry, I don’t think I follow as to why that’s bad. If I pay, say, $1,000 in rent and earn $3,000 a month, it’s the same thing as if I paid $10,000 in rent and made $30,000 a month.

While I can see how those numbers could be reduced into smaller numbers easily, I’m not sure I understand why that is beneficial. My material conditions don’t change.

How does the national debt factor into that?

shortwavesurfer OP ,

Primarily, just that the numbers are unnecessarily large and could be factored down to more manageable numbers.

cali_ash ,

That is an unimaginable sum. What even is 33 trillion dollars?

How is 11 trillion any better?

otp , (edited )

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

shortwavesurfer OP ,

Right, but I figure that making, say, the national debt, at least somewhat more understandable to the average individual, would, at least hopefully, make the average individual hold the government accountable for absolutely uncontrollable spending. as is people just don’t care because the numbers are so unfathomable that they are like fuck it

TheAlbatross ,

I think this is a different issue than big numbers.

I have zero mechanisms available to me to reign in national spending anyway. If the debt were $10 dollars, that’d still be the case. But even if I did, the national debt doesn’t affect me in the slightest, why should I care if it’s $10 or $10T?

shortwavesurfer OP ,

Fair. Eventually the us will enter a debt spiral and the average person will be living on the street eating 1 meal a day and shooting politicians for fucking everything up. However, just revaluing the currency does not solve that problem. That is a bigger, more systemic issue.

urist ,
@urist@lemmy.blahaj.zone avatar

I’m not understanding….

You do realize if you cut all dollar values to be 1/3 of the original value, the national debt becomes:

33 trillion * 1/3 = 11 trillion

This number is still unimaginably large, no?

I really wouldn’t worry about the debt. All nations have debt, and I bet the USAs debit-to-gdp ratio isn’t that bad (been a while since I paid attention to those numbers though).

shortwavesurfer OP ,

I think I read somewhere that the debt to GDP ratio was something like 150% currently.

urist ,
@urist@lemmy.blahaj.zone avatar

Sorry, I failed to finish my whole thought there.

Debt to gdp ratio is probably pretty average in comparison to other nations (admittedly this is a figure I have not looked up in a while). The yardstick we should use to measure how bad our debts are should be other economies. Government debt is nothing like the debt of private citizens.

shortwavesurfer OP ,

I haven’t looked up what other countries debt to GDP ratios are, but if they are similar, at say, 150% then won’t we just end up in a scenario where the entire world crashes and burns and the average citizens all over the world are put out onto the streets? To my knowledge, the crazy circus can’t go on forever.

urist ,
@urist@lemmy.blahaj.zone avatar

No, that only happens if countries stop being able to make good on their loans. To my knowledge most USA debt is owned by USA citizens and corporations in the form of bonds. Nations aren’t just loaning each ofher money they don’t have.

shortwavesurfer OP ,

But the United States is getting to a point where they will not be able to make good on their loans unless they print more money, which will then cause inflation and make the dollars they repay the loan with worth less to the person/company/country who made the loan. We already pay more on our debt than we spend on the military and considering the US cannot stay out of other people’s business, that’s saying something.

urist ,
@urist@lemmy.blahaj.zone avatar

But the United States is getting to a point where they will not be able to make good on their loans unless they print more money,

I’m sorry but to convince me you’d have to find a VERY good source for that claim. Government bonds are the safest bet in the game for a reason. The situation you’re describing would be a global collapse of most economies.

Anyway, you seem very interested in this topic, I hope you find the answers you’re looking for, but I think that wraps this conversation up for me.

shortwavesurfer OP ,

I do find it to be a very interesting topic, and you were a great discussion partner.

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