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A Penny Abolished Is Two Pennies Not Collected Through Coercive Taxation
Last week Mrs. Cole and I took a trip to Niagara Falls. For those of you who don’t know, Niagara Falls is right on the border between the United States and Canada. So there’s a Canadian side and an American side. On this trip we stayed on the Canadian side and spent most of our time there. (By the way, everyone says the Canadian side is nicer and that is accurate. The American side looks like Atlantic City away from the boardwalk.)
Canada is, in theory, a foreign country. But if you live in upstate New York… well, not so much. Going to Canada is a lot like going to Vermont (or it used to be). I see as many cars with Quebec and Ontario license plates as I do Vermont plates.
For those of you who live in other places, we get Canadian pocket change mixed in from time to time. Canadian nickles, quarters, dimes and, of course, pennies, are the same size as their American counterparts, so you may not even notice. (Except that they don’t work in machines.)
But on our trip to Canada, I noticed this sign:
Canada, you see, having already banished the one-dollar bill in favor of a coin with a duck on it (the Canadian constitution requires all coins to have either a bird, a beaver or a caribou on it), is doing away with the penny. Transactions will now be rounded to the nearest nickle. There was a period of transition and a public information campaign and therefore it has been easy and drama free.
‘Nuff said.
Except it’s not ’nuff said! Not for nothing, but how the hell are Canadians ahead of us in this regard? Pennies are damn near useless.
Each penny the US government mints costs between one and a half cents to two and a half cents to mint (I’ve tried to nail down a more precise figure, but it depends on the cost of the metal and when you’re asking). Between pennies and nickles (also damn near useless) its costs 105 million dollars more to mint them than they’re worth.
Now, when you’re talking about a country with a 17,000,000,000,000 dollar national debt, 105 million dollars is small potatoes, but its still 105 million dollars that needs to be taken by force from someone (ME) or borrowed from Communist China.
And that 105 million dollars is just the government’s losses on the penny. Add to that the handling costs of all those pennies in a country with 300 million people. Every business has to have pennies. Every consumer who makes a cash purchase gets them in change, and since each of those pennies only has a third the buying power it had when I was born, they aren’t worth spending. That means we either have to spend time rolling them, fill mayonnaise jars with them, or worse.
If we abolished the penny, not only would less money need to be taken from my pocket, but we could banish this copper colored menace from our lives. You won’t notice, I promise. Mrs. Cole and I didn’t notice at all last week, especially since we paid for everything with cards.
Published in General
Kind of like the old Ike dollars and before, where they had some heft.
Unmentioned so far is the higher-denomination US coinage policy is captive to the vending machine industry, as well as the parochial interests of the US Mint and its patrons on the Hill. That’s why we’re stuck with the badly-designed, too-small, too-thin dollar coin, and a virtually non-existent half-dollar. Vending machines are irrelevant to the penny discussion, however.
Given that the dollar is worth less than what the nickel used to be worth, I don’t seriously agree that we need a big, heavy dollar coin. In fact, why don’t we just redenominate the coins? A penny becomes a quarter, a nickel becomes a dollar, etc. Sure, vending machines would have to make adjustments, but it’s closer to reality.
I disagree about the irrelevance. When was the last time you found a vending machine that accepted pennies? Or for that matter, a parking meter, tollbooth, or anything else coin-operated? Even though pennies are legal tender, the private and government entities that have to handle coins in large volumes have realized that they are too expensive to sort and transport. Another example of the penny’s uselessness.
I live in Montréal and concur that life and commerce are fine without pennies. Since the cost of minting them outweighs their value as legal tender, I would approve a decision to stop minting them and gradually phase out their use–perhaps accelerated by a way to take existing ones out of circulation by recycling the metal into something more useful. And as an added bonus, we could replace FDR with Lincoln on the dime!
Perhaps off-topic, but since tollbooths were mentioned above, why in the world don’t tollbooths across the northeast accept debit or credit cards, or just snap a picture of your license plate and send you a bill like they do in Texas and California? We traveled from Quebec to Virginia and back with a stop in NYC and had to pay scads of tolls, all in cash since we don’t travel those stretches enough to justify an EZ-Pass. Our Ziploc freezer bag full of pennies did not get us very far, or through very fast.
Fair enough, if I were president I would just direct my treasury department to stop making them and let the chips fall where they may (Impeachment? who cares).
I just walked down to my local 7-11 (less than half a mile) and exchanged a few dollars coins for my entertainment for the week.
I am open to abolishing the penny, though I’m not hugely exercised by the issue.
But I’m glad dollar coins have never caught on. I dislike the one-pound coin and the two-pound coin. You hand over a 10-pound note to pay for a 2-pound item, and they hand you a bunch of coins back, and your bag becomes twice as heavy. Plus it’s a pain to pay — rather than having your larger denominations and your small change automatically sorted by bills and pennies, they’re all mixed together.
That’s what supporters of government provided single payer health care say too.
I haven’t carried a penny in my pocket for over twenty years. Unless I happen to see a wheat straw one, in which case I add it to my jar at home.
Heh, heh. I just noticed my cough drops are labeled as gluten free (Duh!), but one couldn’t label a wheat-back penny that way.
I don’t like nickels, either, but you can’t get rid of nickels without abolishing either dimes or quarters, too. I would prefer getting rid of everything smaller than a quarter.
Does this sound too radical? The early United States had half-cent pieces until 1857. In 1858, when Americans were forced to make do with nothing smaller than a penny, a penny was worth about what a quarter is worth today.
Our currency has always followed a 1-2-5 sequence, with the exception of the quarter, which gives us one decade that follows a 1-2.5-5 sequence (although the U.S. once had a twenty-cent piece, too). Yet we decommissioned the two-cent piece a long time ago, half-dollars are unpopular, two-dollar bills are rare, and fifties aren’t very common either. So why not abolish everything but $0.25, $1, $5, $20 and $100? I could to as easily without the occasional $10 as well as I manage without half-dollars.
We missed a great opportunity in 2009. Abe Lincoln was born in 1809; in 1909, we replaced the Indian head cent with the Lincoln head cent; in 1959, we replaced the wheat straw design on the reverse with the Lincoln Memorial. 2009 would have been an excellent time to abolish the penny, and create a $1 coin as an enlarged copy of the Lincoln head cent, perhaps even with the old wheat straw design on the reverse. And like the Sacajawea dollar, it could be made mostly out of copper again. People might even feel some affection for dollar Lincoln coins, unlike the Sacajawea and Susan B Anthony ones.
Of course, we could still do it, but his 200th birthday would have been a more fitting time.
U.S. Bases in Japan (and I believe other locations overseas also) got rid of pennies in the exchanges and commissaries about 2002 if I recall correctly. Too expensive to constantly ship in coins to replace those everyone threw in their jars. I didn’t miss them a bit. In fact I found it annoying dealing with them again when I returned to the States.
Alaska figured out how to get rid of pennies decades ago. No sales tax. When I lived there in the eighties I never saw pennies. Stores didn’t want to deal with them so the just rounded their prices. This problem can be solved by individual states. If they want to keep their sales tax, make it in 5 cent increments. So for example, here in Indiana where we have a 7% sales tax, for every 71 cents the tax would go up a nickel (.71*.07=.05), starting at say 35 cents. So your purchase is less then 35 cents, no tax. From$0.36 to $1.07 it is a nickel and so on.
I spent a lot of time in Canada, and I admit. I love the dollar coins.