I’ll give you a penny for your thoughts. You'll probably just throw it away. Money is not a favorite topic of mine, but I will definitely give it a try. I have three things to discuss about money.

First I want to put some closure to the nearly $300,000 hospital bill that I got.

I do not owe a penny. There’s more on that penny later. Many people have health insurance. My wife had health insurance. Almost all health insurance policies have an “out-of-pocket” limit. Once the patient has spent, for example, $4,000 in a given year, they need not pay more in that year. The health insurance company is responsible for the remainder of the formerly out-of-pocket costs. I found this to be absolutely true. My health insurance company reviewed the hospital claim, requesting an itemized account of the charges. Thank goodness for that, because it contained 6,000 pages of things ranging from ridiculous ($10 per aspirin) to the sublime. I hung up the phone and washed my hands. People need to keep those out-of-pocket limits in mind when dealing with ridiculous bills from medical providers.

Now, what about that penny? Did y’all know that from 1793 until 1857 the United States Mint produced a half-penny coin? It had the image of a woman as a symbol of Ms. Liberty on it. Skip the social commentary on that one, please. That coin had the comparative purchasing power of a dime in today’s economy. The coin disappeared from circulation with barely a whimper or a “tink”.

Now we are faced with a penny (and a nickel) that cost more to manufacture than their face value. This topic has come up every single year in recent history. Someone once figured that if it takes a person more than 6.5 seconds to see a penny on the ground and pick it up, it would cost more than the minimum wage. The value of the copper in the penny exceeds a penny. The industry that would suffer the most from doing away with pennies would be those Coinstar folks. I think that it would be best for the economy if there were a Trump-like move to discontinue making pennies and nickels. The actual rounding up of coins would not necessarily be damaging. Some folks have discussed that. Consider that until 1965 dimes and quarters were made with 90 percent silver. The change to base metal-clad coins scarcely caused a dimple-size dent in the economy. I personally think that the government could take the money that is saved by not making pennies (and nickels) and budget it to the National Endowment for the Arts.

The last money topic for today has to do with home equity loans. Those loans are functionally existent so that folks can borrow money to make repairs on their homes or improve the land around their home (driveways for example). The interest is a tax deduction each year. Supposing that you want to purchase a new car? Can you take out a home equity loan to do that? The short answer is, “NO!” I just bought a new car. A banker that I know suggested that I finance the car with a home equity loan. The banker said that no one would ever know.

I know an accountant who teaches a class about accounting fraud. Here is what my friend told me: Many people illegally use home equity loans to purchase things like vacations and cars. They then use the interest as a tax deduction. That is a violation that is not enforced by the Infernal  Revenue Service. I wonder how much money the government could save by strictly enforcing the rules about home equity loans.

 

Steven R. Edelman is a member of the Observer’s Community Advisory Board, which meets regularly with the editorial board to discuss local issues and contributes op-ed columns. He is a psychologist and lives in Fayetteville.