Getting rid of the penny

The US Treasury Secretary wants to get rid of the penny. I couldn't agree more. Of course "politics" is cited as why the elimination of this almost worthless currency will never happen.

Politics? Makes me pine for The West Wing:

TERRY It's called the "Legal Tender Modernization Act." SAM Which provides for? TERRY The elimination of the penny. SAM I'm sorry? TERRY It would permanently halt production of the penny. SAM Why? TERRY I'm glad you asked. SAM Yeah. TERRY Last year, the U.S. Mint cut 14 billion pennies and shipped them off to the Federal Reserve, which dumped them in our laps. They're worthless. SAM Well, they're actually worth one cent. TERRY The dollar has the buying power today that the quarter had 30 years ago. The penny's buying power shrunk to nothing. SAM Well, that's not true. You can get yourself a gumball. TERRY No, you can't. They cost a nickel. SAM Really? TERRY [sighs] I'm gonna need to give the Congressman a good reason why the White House won't support the bill if they won't support the bill. SAM Oh, don't make me give you a good reason. TERRY You want your $30 billion in school repairs? SAM Well, we're already well on our way with 140 million pennies. TERRY Sam... SAM I'll get you a good reason. Later... JOSH He wants to abolish the penny? SAM He doesn't want to abolish it, as much as he wants to give his boss a reason why we can't. JOSH Well... it's stupid. SAM Yeah, but the thing is it isn't really. JOSH Really? SAM It turns out the majority of pennies don't circulate. They go in jars and sock drawers. Two-thirds of the pennies produced in the last 30 years have dropped out of circulation. JOSH You've been reading about this? SAM It's interesting. JOSH No, it's not. SAM [stands] The Mint gets letters with pennies taped on notebook paper. Letters from citizens who found the pennies on the street and mailed them back to the Treasury to help pay down the debt. JOSH It's almost hard to believe that plan hasn't worked. SAM It's also bad for the environment. Production requires the mining of millions of tons of copper and zinc each year. JOSH Zinc? SAM In 1982, they changed the composition to 97.5% zinc and only 2.5% copper. JOSH Sam? SAM I'm turning into one of the funnel people. JOSH Yeah. SAM [pause] Donna thinks you're still pissed at her. JOSH I'm not. I wasn't before. When did she tell you that? SAM Before she left. [sits] JOSH You've heard from her? SAM No. JOSH She should be done by now. SAM Here's a riddle. What is the most ubiquitous man-made object in America that does not interact with any mechanism or machine? JOSH The penny? SAM Then penny. You can't even throw it in a tollbooth. Well, except for Illinois. JOSH Why can you use it in Illinois? SAM That's an interesting question. JOSH No, it's not. [walks off] Later... SAM You can give me a reason why the White House can't support the elimination of the penny. TOBY This is the Legal Tender... Huckleberry Bill? SAM Modernization Bill, yeah. TOBY We can't support it 'cause it'll never get to the floor. SAM Why not? TOBY Where's the Speaker of the House from? SAM He's from Illinois, which, by the way, is the only state where you can put pennies in a toll machine. Why is that, do you suppose? TOBY It's because... SAM It's 'cause Lincoln's from Illinois! And... so is the Speaker. TOBY Yes. SAM Well, that's a good reason. Well, it's a dumb reason, but it's good enough, right? TOBY Sure.

From The West Wing, War Crimes

But more importantly it reminds me of an idea I have had a long time:

What if the nation imposed a "tax" by which all sales were rounded up to the nearest nickel. The difference, just a couple of pennies in the end, would be placed in a virtual change jar for education or some other fund designated by Congress. This would:

  • save the nation millions from not having to manufacture the penny any more
  • generate potentially hundreds of millions of dollars for an important cause like education or national health care

And most people wouldn't care they were paying a couple cents extra. In fact most people would probably be thankful that they no longer have to spend 3 hours of their life every year rolling pennies, only to learn that all those pennies they just rolled amounted to little more than five dollars.

Recommended Entries

6 Comments

Let's toss some bum off another coin and move Lincoln up in style.

Oh, and Illinois no longer has change baskets at tollbooths. You either get a person or one of those radio transmitter gizmos.

I live in New Zealand; our currency is worth about 80% of USD. We got rid of 1c and 2c coins in 1987, and 5c coins in 2006. Nobody misses them. You will save hundreds of millions of dollars by not having to mint them, and it's just less hassle not having to carry around so many coins!

My understanding is that the major difficulty has to do with monetary. If you do away with the penny, each product would have to choose to round up or down. It don't take a dummy to know which way just about everyone will go. And while a few cents may not seem like much, having every single product and service go up in price across the board would be massive economic inflation. I'd be interested to know how it was handled in New Zealand.

For the record, I think they need to do away with the penny, the nickel and the one dollar bill. Replace the latter with a coin and add a two dollar coin as well.

Jay Allen - Product prices have remained the same (ie, things still cost say, $2.74), the only rounding is done on checkout. Typically 5c or less gets rounded down, 6c or more gets rounded up. And this is only with coins too - if you pay by eftpos or credit card you still pay cents.

(PS - we use 1 and 2 dollar coins. Lowest note is $5)

My first time here. I happened upon so many intriguing notions on your posts mostly its discussion. Such a lot of replies highlight I am not alone that thinks this way

It is fantastic to really find a webblog where the blogger knows amazingly well about his hobby.

Leave a comment

what will you say?


Recent Comments

  • It is fantastic to really find a webblog where the blogger knows amazingly well about his hobby. ...

  • My first time here. I happened upon so many intriguing notions on your posts mostly its discussion. Such a lot of replies highlight I am not alone that thinks this way ...

    gold fountain pens
    Getting rid of the penny
  • Jay Allen - Product prices have remained the same (ie, things still cost say, $2.74), the only rounding is done on checkout. Typically 5c or less gets rounded down, 6c or more gets rounded up. And this is only with coins...

  • My understanding is that the major difficulty has to do with monetary. If you do away with the penny, each product would have to choose to round up or down. It don't take a dummy to know which way just about everyone w...

  • I live in New Zealand; our currency is worth about 80% of USD. We got rid of 1c and 2c coins in 1987, and 5c coins in 2006. Nobody misses them. You will save hundreds of millions of dollars by not having to mint them, an...

Close