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Your Government Inaction: Pennies
A couple of weeks ago, I was visiting my daughter in Boston. While we were walking along the waterfront, she looked down, then picked up and gave me this magnificent numismatic specimen:
This little incident may seem minor and unremarkable, but it is actually a perfect illustration in microcosm of government waste, ineptitude, inertia and corruption.
The one-cent coin was originally a copper disc based on the English penny and larger than a quarter. In the 1850’s, the size of the coin was reduced to the current dimensions and was made of a solid copper alloy until 1982. In that year, to reduce costs, the US Mint started making pennies out of zinc with a thin copper coating. In the last 160 years, pennies have lost some of their “purchase” power. Due to inflation, they are worth about 1/28th of their value in the mid 18th century; In other words, a penny back then could buy more than what a quarter can today.
Quick quiz: Name something that costs 25 cents.
Pennies are worthless. And they have been for a long time. When I was a kid, Goofy sang a song to teach children how to count change. The verse about pennies went like this:
A penny, a penny, a little copper penny.
It can’t buy anything,
It makes your pockets green. . .*
Therefore, our highly efficient US MintIGA makes over 8 million of them a year.** Each penny costs the government about 1.6 cents for metal, production, and distribution.***
Where do all these coins go? A lot end up being thrown away. In Rubbish, the seminal work on the archeology of garbage,**** William Rathje and Cullen Murphy report that about $3000 in change ends up in a single landfill in Massachusetts every day. When I was a cop, I used to do business checks on fast food restaurants and pick up the change under the drive-up windows. There was always change under the drive-up windows. Once I met a vending machine repairman***** who told me he found about $100 in change a month under the machines he picked up to be fixed.
Think what happens when you get a penny in change. Actually, unless you’re a weirdo like me, you probably don’t think about it. You leave it on the counter, in the “take a penny, leave a penny” tray, in a donation bucket, on the floor. It may land in the parking lot after coming out of your pocket with your keys. Or end up in the cup holder of your car, or under the seat where it stays until you vacuum it up. Or until the car is junked and crushed. It may end up in a jar on your dresser, where it sits for weeks or months with other coins until you go through the hassle of dumping them in a coin machine at the grocery store.
And the landfill is actually the best-case scenario. A couple of days after my daughter gave me the penny she found, I picked up another one:
Notice the difference? My penny is one of the old pure copper pennies. It is battered but recognizable while the one my daughter found looks like it has leprosy. The white coating on that one is zinc that has leaked out of the core. Now, technically, zinc is not soluble in water at a neutral PH. Unfortunately, if there is anything in the water that makes it acidic, the zinc dissolves. I’m sure that all that zinc has absolutely no effect on the environment. Heck, if aquariums thought the metal was hazardous to sea life, they’d post signs telling you not to throw coins in the water.
Okay, we’ve established that pennies are a useless nuisance and hassle. Why are they still being produced? It’s a classic case of diffused costs vs. concentrated benefits. While the government wastes over $100 million every year making these worthless things, that comes out to less than 40 cents per American. You can make up for that just by paying attention when you walk around or checking under drive-up windows and vending machines.******
Meanwhile, a big part of that $100 million goes to the people who sell zinc to the mint. Guess who spends a large amount of money every year lobbying Congress to keep the penny? There are also well-paid unionized workers at the mint who love the penny, purely for historical and numismatic reasons, I’m sure. Add in the charities who have the buckets on checkout counters and the people who run the coin machines in the grocery stores and you have a large constituency with an interest in keeping the penny.
In the grand scheme of things, this is all pretty minor. I’m sure nothing like this will happen if the government takes over health care.
* That’s right folks, Goofy has a better grasp of basic economics than our government.
** Oopsy, that should be 8 billion. With a ‘b.’ Oh, well, I was only off by a factor of a thousand. Close enough for government work.
*** Only the government can manage to lose money by making money.
**** Yes, that is a thing, and yes, I’m fascinated by it.
***** He denied being high on intellectualism.
****** Be sure to lift with your knees.Published in Humor
I keep wheat pennies. That’s all.
Thanks, Don. I understand now.
I say we bring back the mill!
We would have to revalue the currency for it to be worth anything.
And a good 5¢ cigar!