Is it time to off the penny?

[rn79870]

The penny no longer facilitates commerce.

Quote »Inflation has eaten away at the value of the penny to such a degree that it no longer facilitates commerce. The fact that the penny is still in circulation does not mean that it is useful. If the half penny were minted then it too would be in circulation, even though it would be nothing but a nuisance. The half penny was eliminated in 1858, when it was worth over ten times what the penny is worth today. Assuming that the timing was correct before, this means that we should have eliminated the penny fifty years ago. The penny is now worth so little that nobody even picks it up off the ground, despite the old "lucky penny" adage.

Even if you agree that the penny doesn't serve any useful function, you may still argue that it is not worth the hassle of retiring it. A reasonable question is therefore: What harm is caused by continuing to mint the penny?

1) Waste of money: The US mint produces about 7 billion pennies every year (roughly half of all coins made each year), at a cost of over $100 million dollars. About one-third of this money is used to pay for the zinc that pennies are made out of, which is why the zinc industry is lobbying to keep the penny in production.

2) Waste of time: Most cash transactions involve the exchange of pennies, leading to an increase in the time for the transaction to take place. The National Association of Convenience Stores and Walgreen's drug store chain estimated that handling pennies adds 2 to 2.5 seconds to each cash transaction (remember that we are including the occasional customer who spends 30 seconds looking for the penny in his pocket).

Let us estimate that each person goes through two of these transactions per day and that on average there is one person waiting in line (making for a total of three people's time wasted in each transaction). We can then calculate that the presence of pennies wastes (2 transactions/day) X (2 seconds/transaction) X (3 people per transaction) = 12 seconds per day, or 1.2 hours per person per year. Of course, when you get home you still have to find something to do with your pennies, meaning that probably only about half of the wasted time is directly connected with a cash transaction (the other time is associated with counting pennies etc), giving a total of 2.4 wasted hours per person per year. The mean wage in the US is approximately $17/hour, implying that each of us is effectively "paying" $40 per year to keep pennies in circulation. Given that the US has ~ 240 million adults, using pennies is currently costing the nation $10 billion per year![/quote]The problem they ignore is that pennies are necessary for too many things. If retired, will 8% sales tax become 10% tax? Will 1 and 2 cent per gallon increases in gas prices now be 5 cent increases? This isn't much but It will add up to be more than you might think. The only valid reason to eliminate it is the fact that it apparently costs the government 2.5 cents to mint a penny. What do you think, penny, no penny?

http://www.retirethepenny.org/

[audtatious]

I've always hated "brownies"

Maybe they will lower taxes to the nearest 5?

[The Count]

My gosh, I wish the dang thing would be put out of its misery.

You can still have odd percentages, just figure it and round. We've been doing it for YEARS (when's the last time you saw gas that wasnt x.xxx?). Nickles could go too, and build the sales tax into prices. Also make the quarter into a smaller.20 peice, shrink the half dollar, make doller coins smaller, mint $2 coins (maybe $5 coins too), and get rid of $1 bills. Just imagine how much easier life would be.

[rn79870]

I hate carrying coins. I just got a couple of those president dollar coins and I'm sure I'll be droping them for quarters. Paper money is the only way to go. Coins just make your pockets heavy... I think America hates dollar couins. they have tried several times to phase them in and they just never catch on.

[krimsonviper]

but, but, what am i going to throw at people when i have road rage?

seriously. If it costs more to manufacture the thing, then why not just take it out all together? Waste not, want not right?

[AZhitman]

If retired, will 8% sales tax become 10% tax?

Bobby, I'm guessing math wasn't your strong point?

I can see a lot of hassles coming from elimination of the penny. While I agree it could go, I also know the $100M saved would simply go to subsidize all the rearrangement of the retail industry needed after the penny's demise.

[pflicht]

Out with the penny. I've thought that for a LONG time.

[smockers83]

Keep the penny. However, I "don't like them" either so to speak, I take all of my pennies that I acquire over a year and deposit them...actually use them to pay no more than 5 times in the same time period.