Is the demise of the Lincoln penny approaching? Public sentiments appears slightly shifted toward its continual survival and the penny is guaranteed to be around for the next several years. The newly designed pennies for 2009 celebrating the bicentennial birth of Lincoln will see to that by itself.
But is sentiment for the penny changing and moving toward its elimination?
While the House is debating changes to the composition of coinage in order to make coins like the penny and nickel once again profitable to mint, more focus is placed on whether the penny should be produced at all. Even the latest House hearing had congressman pondering the pennies’ continuation.
The 60 Minutes segment, Should We Make Cents?, and Secretary of the Treasury Henry M. Paulson’s comment in favor of eliminating the penny are further recent examples.
The CoinNews Inflation Calculator shows that it takes 21 pennies today to equal the buying power of the penny back in 1915. In 1960, 31 pennies could buy a gallon of gas. Now it would take several rolls for that one gallon.
Like it or not, given the trend of sentiment and inflation, it would seem the penny could be approaching borrowed time.
Here is an interesting editorial, Dump the penny, from the Chicago Tribune.
- US Coin Composition Debate Returns with High Penny and Nickel Costs
- Eliminate the U.S. Penny?
- Dale Earnhardt Sr., a Young Girl and a Lucky Penny
{ 9 comments… read them below or add one }
Abolish the penny and make nickel out of aluminum! No one use penny to buy things out of vending machine. Make 5 cent nickel out of aluminum that is cheaper than nickel-copper alloy! And make dime, quarter, and half dollar out of nickel-plated steel.
It seems to me that everyone’s missing a few important details. Pennies are used, every day. If they weren’t, you would never see one, just as I’ve never received a dollar coin from anybody. Interestingly enough, not only do I get pennies every day, I also find that they spend just as well as other coins, and often save time and trouble by allowing me to make exact change for a purchase. Sure, you could eliminate the penny and force everyone to round all prices up (they will of course never be rounded down) but then we as a nation stand for freedom, including the freedom to set your own price, which today can be set at any amount, in a very logical fashion– the standard decimal system, which does not stop at 0.05.
Another thing which is not being considered is the longevity of a penny. Once placed in circulation, a penny will normally be useful for decades. I occasionally receive wheat pennies which were minted in the 40s and 50s and have been circulating all this time. Sure, a penny may cost 1.7 cents today, but after decades of use, we’ve surely gotten our money’s worth out of that coin. Consider the poor lifespan of paper money which must be replaced every 2 years or so on average, and I dare say coins, even the lowly penny, are a good deal for the taxpayers.
I feel that it is time to abolish the penny. It is holding back our country’s monetary system. For those of you worried about rounding of prices being unfavourable to the consumer, jusst write the government requesting if it does happen round prices down. I try to use coins as often as possible, but I try to avoid pennies as often as possible. This is also the more of a hassle due to the quarter being the largest coin. I would like to see a new 5,10,20,50 cent and nickel sized one dollar coins being smaller and of a cheaper alloy. I also am for wider circulation of the two dollar bill.
Time to dump the penny, and to be green legalize the smelting of pennies for scrap. Prices will end up being $*.95 instead of the lame $*.99 stupidity. Even if they round the total up (for the sales tax added), with $*.95 pricing standard you come out ahead.
And we could use a dollar coin.
Pull your pre-82 pennies now. when they do abolish the penney they and industry starts smelting them the ones that are left will be worth 10x face. This is your chance to be ahead of the curve. dont wait, start pulling copper pennies now.
The mints make what the banks order. The banks order and stock the coins their customers request to conduct commerce. This shows that cents are produced in response to the demands of the marketplace, so by definition, the cent coin is needed. During the worst recession in decades cent production did, in fact, drop precipitously (65% compared to 2008 mintages)as commerce slowed and people increased the national inventory of circulating coins by digging out old coin jars and reintroducing long-impounded coins, likely mostly pennies, back into circulation. Five and a half billion cents coined in 2008 down to two and a third billion cents made in 2009, is a big drop, but people still *asked for* over two billion pennies. Of course, in perspective, that’s still only about eight pennies per American.
People need ‘em, but if you don’t like ‘em, you don’t have to use ‘em!
Although the penny has almost no purchasing power, charities around the world depend on penny drives to raise money. If we rounded everything to the nickel, people would be more reluctant to toss loose change in the charity jar.
The penny is also one of our most tangible everyday reminders of Lincolns significance in our history. Don’t be suprised when pro-penny sentimentalists resists the pennnys retirment– Americans will always be traditionalists.
Another item missing from the discussion is that the countries that have successfully eliminated their low-denomination coins (a) don’t have sales taxes and (b) have more centralized governments that can enforce fair-rounding rules.
The US has a crazy quilt of state, regional, and local sales taxes that would be difficult to administer equitably in the absence of a low-denomination coin. Yes, it would probably all even out at the end of the year, but there would be inevitable distortions due to an item’s price being rounded down in one community and rounded up in another caused by a minor difference in tax rates. Most other countries use variations on a VAT, so prices tend to be much more uniform.
And while countries such as Sweden and others have national rounding rules, there would be volcanic protests about “restrictions on business freedom” if the US tried to impose that sort of regulation. Merchants would be afraid of losing anything due to downward rounding so without controls we’d soon see every single item ratchet up to the next nickel or dime, hardly the price-neutral effect envisioned by opponents of the penny.
If nothing else, maybe we need to bring back the 2ยข piece. Because there’s no denomination in between the cent and nickel, it takes more pennies on average to make change than it does for any other denomination. But with a 2 cent coin, you’d never need more than 1 penny to make change. That would cut out about 2/3 of all penny production in a single stroke!
The penny will always be needed as a place marker. The only problem we have is what to make that marker with. Look at the huge size difference of the large pennies of the mid ninteenth century to the smaller ones of today. The larger the population spending money is, the cheaper the metal seems to get. I just hope it stays copper colored.