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.
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.