A Thought For Your Pennies...
Oh, Canada! How smart you are! The Canadian government just announced that they are doing away with the penny. It seems that one Canadian penny costs more than a penny to produce; they estimate that they will save $11 million per year by no longer producing the coin. Canada is not the first country to make this all-too-logical decision - other countries who have eliminated their smallest-valued coins in recent years include the United Kingdom, Australia, and Israel. So if it's good enough for our friends north of the border, why not for us? A US penny actually costs 2.4 cents to make - imagine what our country could save by eliminating it.
I can't imagine that the repercussions would be very significant. Cash payments could be rounded to the nearest nickel, and legislation could guarantee that. All electronic transactions, especially credit card purchases, could still be made to the exact cent. In fact, my favorite pizza parlor has already eliminated the penny. If I order a pizza and the final amount shows $16.48 on the register, the cashier tells me the amount is $16.45. Imagine that - I actually save money this way! And all those $19.99 prices that sellers think make them sound like they're less than $20 may very well get changed to $19.95.
If it were up to me, I'd go one step further; I would do away with the dollar bill. We already have dollar coins, and I personally think it's a pain that there is virtually nothing you can buy without reaching into your billfold for paper money. Wouldn't it be easier to just pluck a few coins from your pocket the next time you pick up a newspaper or a soft drink? And don't tell me, "people don't use dollar coins!" They will, if it's the only game in town. Now a dollar coin costs about 5 times as much to produce as a dollar bill, but it lasts 15 to 25 times longer. So the initial investment might be a bit higher, but the federal budget would be reduced in the long run.
Well, it all makes sense to me. How about you?
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It makes sense to me, especially inasmuch as it now costs 2.6 cents to make a penny. Furthermore, since the early 1980s pennies have been made from zinc and then clad with copper. When the copper wears off or is otherwise breached, the pennies pick up some dangerous edges. Ponder that when your kid swallows a coin and now you have to deal with the possibility of it lodging in their system AND the potential toxic effects of the metals.
ReplyDeleteI imagine that most of the resistance still comes from Illinois, being the Land of Lincoln and all that, and the only state which still accepts pennies in the toll booths. Some charities also like the pennies because they get a huge amount of their donations from coin jars.