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Americans fear the penny will drop


roaddevil
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Americans are being encouraged to hunt behind the sofa for their lost pennies and to take their dusty jars of old loose change to the bank if they want to save the country's historic one cent coin.

 

The copper-coloured penny, which for 100 years has featured the gaze of Abraham Lincoln, is facing ever more shrill calls for its abolition. The reason is the soaring cost of replacing the billions of coins taken out of circulation and kept in jars each year.

 

It is no longer possible to be sure about the number of pennies in existence but the best guess is around 300 billion. End to end, they could be wrapped round the Equator 150 times. The trouble is, about a third are out of regular circulation.

 

More than half the coins produced by the US Mint now have to be pennies. And because pennies are 97.6 per cent zinc - plated with copper - this decade's commodities price boom means they are now more expensive to make than they are worth. Including production and distribution, the Mint says it spends at least 1.23 cents for each new one cent coin.

 

Meanwhile, inflation has largely stripped them of their purchasing power. They are worth less in real terms than the UK's halfpenny when it was withdrawn 22 years ago. In wealthy cities such as New York, many businesses routinely round to the nearest five cents when giving change, to speed things up at the cash register.

 

Surveys show only one in four Americans support abolishing the penny, fearing retailers will use the changeover to raise prices surreptitiously.

 

But there is a new Bill before Congress that would eliminate the penny. Robert Whaples, economics professor at Wake Forest University, North Carolina, is among those campaigning in support of the change.

 

"Eliminating the penny will have a negligible impact on inflation and on convenience store costs and profits, but it will save time for customers and clerks, which may be worth about $730m per year," he has said in a new paper.

 

"The total effect on buyers and sellers from rounding current totals to the nearest nickel would be very, very small."

 

 

 

 

:ninja: no they are my best american coins there lovely red/brown/orange colour wahhhhhhh

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Since Congress has passed and the President has signed the legislation requiring the change to the cent in 2009 to honor the 200th Anniversary for Lincoln, it's not likely that they will do anything with the cent between now and then. IMHO.

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I for one hope the US public wakes up to the stupidity of continuing to produce the cent. Nobody wants these things for any practical reason. The fears of retailers rounding up if the cent was eliminated is unfounded. The total cost of purchases will be rounded "off" to the nearest nickel, and there's no way they can manipulate the cost of individual items to take advantage of the total cost. Besides, the real concern should be with the diminished value of our currency through inflation caused by poor fiscal policies. That's why the penny is so worthless that every store has a "take a penny, leave a penny" jar at the register.

 

Punt the penny and ditch the dollar, too, while you're at it. Both are anachronisms in the modern economy that we would do well to get rid of.

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Why not get rid of the cent and replace it with a new 2¢ coin? Then any impact from rounding would be minimal and production costs would drop.

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What nobody has noted so far in this thread is that the nickel has an intrinsic value of about 7.1¢ recently, but there are no calls for it's elimination. I think the funny thing is that getting rid of the penny has been discussed since the penny shortage back in 1974. Yet still they make them. It is worthless and moreso, but if they got rid of it people would have a cow.

 

For the same reason the dollar bill will not be eliminated anytime soon. It is a holdover from a time when a dollar was actually worth something and people don't want it to become some worthless ugly coin.

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Why not get rid of the cent and replace it with a new 2¢ coin? Then any impact from rounding would be minimal and production costs would drop.

 

I think we should follow the lead of most of the rest of the world and drop our lowest denomination coin. Hardly anyone stoops down to pick up a penny these days, and I don't think replacing the penny with a two cent coin would fix the problem (at least not for long, the way inflation eats away at the value of our money). Just bite the bullet, admit that the penny isn't worth producing any more and be done with it. Nostalgia is not a good basis upon which to make public policy.

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What nobody has noted so far in this thread is that the nickel has an intrinsic value of about 7.1¢ recently, but there are no calls for it's elimination. I think the funny thing is that getting rid of the penny has been discussed since the penny shortage back in 1974. Yet still they make them. It is worthless and moreso, but if they got rid of it people would have a cow.

 

For the same reason the dollar bill will not be eliminated anytime soon. It is a holdover from a time when a dollar was actually worth something and people don't want it to become some worthless ugly coin.

 

Don't know where you get the intrinsic value of the nickel being 7.1¢.

 

This article says it costs the mint 5.73¢ to produce the nickel and this site says it's intrinsic value is 6.34¢.

 

In any event, I think the reason the penny is an easy target is that it's worth so little that nobody really wants them any more, as evidenced by the penny jars at every cash register. Also, the mint makes far more pennies than nickels, so the savings to the public treasury would be larger be abolishing the penny.

 

I think it's great that the public is at least discussing the issue, because it highlights the inflationary problems with a fiat money system not backed by any real assets.

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I think it's great that the public is at least discussing the issue, because it highlights the inflationary problems with a fiat money system not backed by any real assets.

 

 

It has come down a bit since I last checked coinflation.com:

 

Lincoln Cent 1909-1982 Cent (95% copper) * $0.01 $0.0205417 205.41%

Jefferson Nickel 1946-2007 Nickel $0.05 $0.0634785 126.95%

Lincoln Cent 1982-2007 Cent (97.5% zinc) * $0.01 $0.0107877 107.87%

Jefferson Dime 1965-2007 Dime $0.10 $0.0197687 19.76%

Washington Quarter 1965-2007 Quarter $0.25 $0.0494243 19.76%

Kennedy Half Dollar 1971-2007 Half Dollar $0.50 $0.0988498 19.76%

Ike Dollar 1971-1978 Eisenhower $1.00 $0.1977003 19.77%

SBA 1979-1981, 1999 SBA $1.00 $0.0706062 7.06%

Sacagawea 2000-2007 Sacajawea $1.00 $0.0556363 5.56%

 

And then backing your argument about "fiat" money:

 

Silver War Nickel 1942-1945 Nickel ** $0.05 $0.7145 1429.10%

1964 Roosevelt Dime 1946-1964 Dime $0.10 $0.9187 918.70%

1932 Silver Quarter 1932-1964 Quarter $0.25 $2.2967 918.70%

1962 Franklin Half 1948-1963 Half Dollar $0.50 $4.5935 918.70%

JFK half dollar 1964 Half Dollar $0.50 $4.5935 918.70%

40% JFK 1965-1970 Half Dollar (40% silver) $0.50 $1.8782 375.64%

Peace Dollar 1921-1935 Peace Dollar $1.00 $9.8228 982.28%

silver Ike dollar 1971-1976 Eisenhower Dollar (40% silver) $1.00 $4.0161 401.61%

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