Monday, February 18, 2013
Time is running out for the U.S. penny
The cost to manufacture a penny is double its monetary worth. Common sense dictates that the U.S. should discontinue the penny. But sentimentalists are clinging to the idea of the penny and could prolong its life. But they’re delaying the inevitable.
During a Google+ Hangout interview on Feb. 14, the most popular question posed to President Barack Obama was why the U.S. has not stopped making pennies, according to Townhall.com.
“I don’t know,” he said. “This is not going to be a huge savings for government, but any time we’re spending money on something people aren’t going to use, it’s not necessary.” Obama said. But Americans might be too attached to pennies, he said.
Cutting the penny out of U.S. currency would save the government $100 million over a decade. The cost to mint a penny is 2 cents, as of 2012.
The public policy website PolicyMic has a good list of pros and cons for eliminating the penny. The arguments for getting rid of the one-cent coin greatly outweigh the arguments in favor of keeping it.
In short, pennies are a waste of resources, a drag on productivity and a hazard to children and pets if swallowed.
The only entities that benefit from the existence of pennies are metal producers and Coinstar, which makes a business of redeeming pennies and other coins.
Some businesses already have stopped taking pennies or opted to round bills to the nearest nickel. They include some outlets of Chipotle Mexican Grill (see New York Times and NJ.com articles) and Dunkin’ Donuts (see article by Minyanville).
U.S. businesses and governments still will account for cents, only the penny would go away. You’ll still see odd-number cents show up on your statements and for electronic payments and those cents can add up. But with financial transactions going increasingly to electronic payment options, the penny is becoming irrelevant.
Related reading: Wikipedia entry on the U.S. penny.
Photo: Pennies from Wikimedia Commons.