Retire the Penny?

Discussion in 'Economy' started by manifold, Apr 10, 2008.

  1. manifold
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    manifold Diamond Member

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    What do you make of this?

    http://www.retirethepenny.org/


    From the site:

    The penny no longer facilitates commerce

    Inflation has eaten away at the value of the penny to such a degree that it no longer facilitates commerce. The fact that the penny is still in circulation does not mean that it is useful. If the half penny were minted then it too would be in circulation, even though it would be nothing but a nuisance. The half penny was eliminated in 1858, when it was worth over ten times what the penny is worth today. Assuming that the timing was correct before, this means that we should have eliminated the penny fifty years ago. The penny is now worth so little that nobody even picks it up off the ground, despite the old "lucky penny" adage.



    Even if you agree that the penny doesn't serve any useful function, you may still argue that it is not worth the hassle of retiring it. A reasonable question is therefore: What harm is caused by continuing to mint the penny?



    1) Waste of money: The US mint produces about 7 billion pennies every year (roughly half of all coins made each year), at a cost of over $100 million dollars. About one-third of this money is used to pay for the zinc that pennies are made out of, which is why the zinc industry is lobbying to keep the penny in production.



    2) Waste of time: Most cash transactions involve the exchange of pennies, leading to an increase in the time for the transaction to take place. The National Association of Convenience Stores and Walgreen's drug store chain estimated that handling pennies adds 2 to 2.5 seconds to each cash transaction (remember that we are including the occasional customer who spends 30 seconds looking for the penny in his pocket).

    Let us estimate that each person goes through two of these transactions per day and that on average there is one person waiting in line (making for a total of three people's time wasted in each transaction). We can then calculate that the presence of pennies wastes (2 transactions/day) X (2 seconds/transaction) X (3 people per transaction) = 12 seconds per day, or 1.2 hours per person per year. Of course, when you get home you still have to find something to do with your pennies, meaning that probably only about half of the wasted time is directly connected with a cash transaction (the other time is associated with counting pennies etc), giving a total of 2.4 wasted hours per person per year. The mean wage in the US is approximately $17/hour, implying that each of us is effectively "paying" $40 per year to keep pennies in circulation. Given that the US has ~ 240 million adults, using pennies is currently costing the nation $10 billion per year!
     
  2. Paulie
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    Paulie Platinum Member

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    Pennies dated 1982 and prior are mostly copper, and are currently selling for .02 and even more. If it were legal to melt them in this country, you could make a nice "chunk of change" on the side. Still though, you can sell them on ebay. Many people are, and they're doing well with it.

    I've always been an advocate for scrapping the penny, but make sure you keep your pre-1982's. If you don't want them, send them to me. I'll take good care of them.
     
  3. Angel Heart
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    Angel Heart Conservative Hippie

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    All of our military bases over sea's did away with the penny long before I was there in the early 90's. Everything on the base was priced at the nickle.
     
  4. Paulie
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    Paulie Platinum Member

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    Yeah when I was in the Air Force in the late 90's/early 2000's I remember goods at the AAFES being sold in .05 increments.
     
  5. The_Hammer
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    The_Hammer Member

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    It'd only make sense if all the pennies in circulation were enough to make a dent in infaltion.
     
  6. Angel Heart
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    Angel Heart Conservative Hippie

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    I say just stop making them. Let the ones in circulation, stay in circulation. Have all banks turn in all of the stock they have. As the bank get more in they turn them in. It will actually put value back in the penny, at least as a collectors item. If it does happen, I'm going to hold on to every penny I have. Less and less there are, the more the ones left are worth.
     
  7. Paulie
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    Paulie Platinum Member

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    LOL! Not by a LONG shot.
     
  8. bennylava
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    bennylava Member

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    Get rid of them. They should have ended it when people started putting out the "take a penny, leave a penny" bowls.
     

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