I’m no fan of the penny, and agree that we should get rid of the damn things. However, pointing out that they cost more than face value to make I think sortof misses the point. It’s not a commodity being sold on the open market. If it were only being sold once, yes, it would be a bad deal for the manufacturer to sell something at less than it costs to make it. But it’s not being “sold” at all. The government makes money for the utility of the thing, and a penny could potentially be used in thousands of transactions. If we use a penny twice, does it suddenly become a good value?
The better argument is that the penny is dead weight, and would be a poor investment of our economic and natural resources even if it cost half a penny to produce.
Everything costs more than it feels like it should. that is almost a law of human perception. For the thing to cost twice its face value seems about in line with everything else, i.e. ouch, but understandable.
Thanks to @Medievalist for what I hope is a compliment. I’ve never been accused of intelligent discourse around here before!
Let’s say we create a Bank of the United States and pay off the federal reserve with it and stop using the federal reserve. Then we pay this debt down and bring inflation down and see if we can lower the price of copper (and everything else for that matter).
Well, the proper takeaway isn’t that “the penny has become too expensive to make”, but, rather, that “the currency has been inflated to the point that the US One Cent coin isn’t even worth as much as the cheap pot metal it’s made of.” (Never mind the value of the good honest copper coin it pretends to be!)
On reflection, I think I fell into same trap that others fall into: I was only considering the cost of supporting cash from the perspective of its lowest denomination. I suspect the cost of making a hundred dollar bill is far less than its face value and the value being purchased when making currency isn’t the value of the money itself, but it’s long term security, stability, and utility.
So from that perspective, the argument for getting rid of the penny shouldn’t be “because it costs more than it is worth!” It should be “because it no longer contributes significantly to the security, stability, and utility of the US dollar.”
I think.
I mean really, at the end of the day pennies are just a PITA.
Turns out pennies used to be made of bronze. 95% copper and the rest tin and zinc. I had never heard that before! Up to 1962 at which point they removed the trace tin and it became copper and zinc only, which, I guess, is not technically bronze. 1982 they changed to the current copper plated zinc, 2.5% copper.
I remember the year copper became so expensive, 2011, it was a regular occurrence to have the wire stripped from the conduit that supplied our street lights. All the sidewalk junction boxes around here are epoxied shut now.
So ditch the dollar bill as well. Traditionally, the two arguments against were Kennedy and Kerry, but neither is still in the Senate, so the Massachusetts delegation no longer has the committee chairs to protect Crane’s business.
I’m looking at the even bigger picture, why are we using cash at all anymore? Why stop at eliminating the penny, or even the nickle? I see no good reason in this age of relatively cheap and accessible technology that we even need to still be printing and minting and swapping pieces of paper and bits of metal. We should go ahead and transition to using accounts and having the money all be digital.
We could still let the banks take in coins and bills and put it on your card or in your digital account for a good long time so that folks would have time to transition, but do away with it being something that’s used in stores and carried around all the time and exchanged between anyone but you and your bank.
@Jim_R, @glenblank, the zinc core isn’t a problem for most purposes. You generally want to use copper washers in a specific project because it won’t rust (and because when it does corrode the corrosion has different properties from rust) and because it’s the right hardness. For example, you might use copper washers for riveting straps into articulated steel armor - drilled pennies work just as well, at a savings of about four cents per washer. Similarly, you might use solid copper roofing nails of the right diameter to substitute for expensive copper rivets - throwing the excess length into the melt bin for making bronze later.
If the copper’s alloyed with tin or arsenic, it’s bronze. Unless it has any zinc in it, in which case it’s brass. Beyond those distinctions, arguments can last well into the night, with many conflicting examples readily available in literature.
Someone needs to point out the big picture, here. How much does it cost to print a $20 bill? Even if the cost of a penny were isolated from the cost of making/printing other currency, a penny is a symbol. It is used to purchase goods thousands of times during it’s lifetime. The value of a penny as an economic “marker” far outweighs it’s production cost. I’m not saying that we can’t or shouldn’t phase out the penny. I’m just saying that the argument that we should do so solely based on it’s production cost is logically flawed.
Another reason to phase it out, labour savings. How many people have to work X amount longer tallying tills because pennies are money & money must be accounted for?
That said, there is no one fixed value of a given currency that is ‘from god’ and should not be inflated or deflated to match the goals of the society it serves.
Money is a system of credit and trust. Coins, bills, cheques - all part of the same system of trust. The number assigned to a unit within a particular credit system is much less relevant to any serious discussion than the confidence people have that they are receiving a unit of exchange with meaningful value that will be respected by others.
All the fuss about the long-term deflation of this or that currency acts as if the last 100 years has been a period of stagnation and decline. Absurd on its face.
Having worked in a qualified hardware store in my youth I am aware of the differences in opinion around these issues. I trust you know what you’re talking about. I visited the mints website this morning to find what they said about it. That is where my comment originated. What you’re saying is the penny was technically brass, but the appearance is more like bronze. there are brass coins in other countries and they look like brass. I suppose it was the low zinc content that results in the color. I always assumed they were just copper. Appreciate your sharing of knowledge. Happy riveting.
‘Overheads, sir. There’s overheads wherever you look.’
‘Even underfoot?’
There too, sir,’ said Shady. ‘It’s ruinous, sir, it really is. Y’see, it costs a ha’penny to make a
farthin’ an’ nearly a penny to make a ha’penny. A penny comes in at a penny farthin’.
Sixpences costs tuppence farthin’, so we’re in pocket there. Half a dollar costs seven pence.
And it’s only sixpence to make a dollar, a definite improvement, but that’s ‘cos we does ‘em
here. The real buggers are the mites, ‘cos they’re worth half a farthin’ but cost sixpence ‘cos
it’s fiddly work, their bein’ so small and havin’ that hole in the middle. The thruppenny bit,
sir, we’ve only got a couple of people makin’ those, a lot of work which runs out at seven
pence. And don’t ask me about the tuppenny piece!’
Pennies should be phased out. Yes. But stating that they cost more to make than their face value is irrelevant. Pennies maintain their $0.01 value as they are handed from person to person. So, even though their face value is $0.01, the amount that they benefit the economy increases with each transaction.
I’m not trying to be pedantic. If you are making an argument, you should be making it for the right reasons. (Actually, I am trying to be pedantic.)
The production cost isn’t the only economic factor. You also have to keep in mind the cumulative wasted time they add to nearly every cash transaction in America even though most people would just as soon let those transactions get rounded to the nearest nickel. That’s one reason no vending machines take them—they are quite literally more trouble than they are worth.
The funny thing is we probably would have done away with them by now if it weren’t for the Zinc industry’s vigilant lobbying efforts. They even have a front group called Americans for Common Cents, which offers totally-legit-and-not-at-all-biased info such as this:
The penny continues to enjoy overwhelming support from a majority of Americans, and for good reason. It plays an important role in our everyday lives and in our nation’s economy, and alternatives have consumer and social costs. Consumers benefit with a low denomination coin, with the penny helping keep high prices in check for millions of America’s hardworking families.
What the heck are they talking about? Are there a lot of hardworking American families spending money on items that cost four cents or less?
They got rid of the penny up here in Canada, and no one skipped a beat, i can’t say i’ve ever once missed pennies or even noticed they were gone other then no longer having to continually empty my car, pockets, bags, into a giant penny bucket that i’d never bother to roll and take back to the bank. i still have the bucket full of pennies, lol.
anyone else have a penny bucket/jar because carrying pennies isn’t worth the weight or time?
before the switchover i’d leave my pennies in the take a penny/leave a penny tray on any counter that had one.
pennies are a pain in the arse, and cost more to deal with at every step in every transaction then they are worth. it isn’t that they just cost more to make then they are worth, they continue to cost more then they are worth to both consumers and businesses and banks. There is a reason the usa stopped making ha’pennies in 1857.
i wish Canada would follow NZ and get rid of the nickel as well…
