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In which John discusses the denomination effect and argues that we should stop printing one-dollar bills and transition to one-dollar (and two-dollar) coins, which according to the nonpartisan GAO will save the United States government 5.5 billion dollars over the next 30 years. (Also, John discusses loving the mountain goats and hating pennies.)

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A Bunny
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Good morning, Hank, it's Friday, a couple things - Thing One: In re your last video, it is not an anchoring bias to dismiss the opinions of people who don't like The Mountain Goats, it's just a correct aesthetic judgment. Hank, there are facts in this world, like the fact that my Sing-a-ma-jig compositions are excellent, but inferior to Mozart. And here's another fact: The Mountain Goats are a great band, and yes my voice cracked. I'm angry.

Thing Two: Hank, your video on Wednesday reminded me of my favorite kind of bias: the denomination effect. The denomination effect shows that people are biased towards spending money in small denominations, like, we're more likely to spend one hundred $1 bills than we are to spend one $100 bill. It's also showing that across the world, people are biased towards spending coins rather than spending paper money. Although, not American pennies, of course, because no one spends American pennies, because they're worthless and evil. You wanna talk about an anchoring bias, Hank, I have an anchoring bias against people who don't hate pennies. So, Hank, you know why I hate pennies, it's because they cost more than a penny to make, and they also don't work as money, because they don't facilitate the exchange of goods and services, like, try going to a gas station and spending 383 pennies on a gallon of gas. Lots of countries have eliminated their pennies, like, the Netherlands has no pennies, and you know what happened? Nothing. Inflation didn't go up, charitable contributions didn't go down, pennies are useless! Also, if we got rid of the penny, it would save the government millions of dollars a year, it's the kind of thing that you would do if you were trying to, say, cut the budget, and you were serious about it, instead of just playing political games. Right, I'm getting distracted by my hatred of pennies.

The denomination effect does not apply to pennies, but it applies to most coins, you know, coins that have value. Which brings me to the $1 coin. Hank, there are like, a billion $1 coins sitting around the United States but no one ever uses them because people like paper money. But the non-partisan government accountability office recently reported to Congress that if we eliminated the $1 bill, and introduced $1 and $2 coins, we would save $5.5 billion over the next thirty years. Billion with a "B". This is for two reasons: First, it costs a lot of money to print $1 bills, it now costs 9.6 cents per bill, thanks to the rising price of cotton. And secondly, the average $1 bill is only in circulation for 40 months, whereas the average $1 coin would be in circulation for, like, 30 years. And we wouldn't even have to mint any new coins, because we already have a billion $1 coins that no one is using, we just need to remove the bills so that people have to use them. And if we did that, people might be slightly inconvenienced for a while, although they seem to have gotten used to it in Canada and Europe, but aside from saving the federal government $5 billion, the denomination effect tells us that people would also spend more money, and consumer spending is the number one driver of economic growth in America. In short, Hank, there are a lot of hard choices to make, but the denomination effect reminds us that there are also some easy choices to make, and we aren't making them.

OK, Hank, a couple other things: First, Nerdfighters, thank you so much for continuing to make The Fault in Our Stars a bestseller on amazon and Barnes & Noble, I don't even know what to say about that, but, you're made of awesome. Also, I want to thank Nerdfighters Julie and Martha for making, my favorite website EVER. You'll find a link in the doobly-doo. It succinctly answers the question I've been asked hundreds of times this week. Speaking of which, please don't forget that you are deciding which color Sharpie I will use to sign these books. Nerdfighters, this is serious business, there is a link in the doobly-doo to a poll in Your Pants, is not something that people say about serious business. No, but really, I do want to get the color right, so vote. Oh, and don't forget to read the first six chapters of The Great Gatsby by Wednesday, I know you don't come on YouTube for homework, but you just got some. Hank, I'll see you on Monday.