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The Almighty Buck United States

Is It Time To Kill the Penny? (npr.org) 36

Posted by BeauHD from the good-of-time-as-any dept.
COVID-19 has constipated the economy and prompted the U.S. Mint to cut back on coin production to keep its workers safe. As NPR's Greg Rosalsky writes, this could be a rallying cry for a long-running movement that has lost steam in recent years: Kill the penny! "With the closure of the economy, the flow of coins through the economy has ... kind of stopped," explained Federal Reserve Chair Jerome Powell last month. Is now the time to kill the penny? From the report: Last year, almost 60% (PDF) of the coins that the U.S. Mint churned out were pennies. 60 percent. It made more than 7 billion (PDF) pennies. Seven billion. That's a lot of manpower that could be used toward making coins we actually need. The penny is basically worthless. Actually, it's worse than worthless. It costs the U.S. government about 2 cents (PDF) to produce every penny. Pennies aren't even worth our time. Wake Forest University economist Robert Whaples has calculated that the typical American worker earns a penny every two seconds. It takes most of us more than two seconds to fumble around with change or pick a penny off the ground, which explains why there are so many pennies on the ground. Money is supposed to be the medium of exchange, not dead weight.

For most of U.S. history, we never had a coin as worthless as the penny is now. Back in 1857, we killed the half-cent coin -- which, when adjusted for inflation, was as valuable then as about 14 cents is today. And we did just fine. [...] The U.S. Mint lost over $72 million (PDF) making pennies last year. But there doesn't seem to be much urgency about this because in the grand scheme of the federal budget, it's just pennies. We reached out to the U.S. Mint to discuss the coin shortage, and its representative Michael White told us that after retooling to keep its employees safe during the early part of the pandemic, the U.S. Mint has been operating at full capacity since mid-June. But depressed retail activity and reduced deposits by coin processors -- like, you know, those machines at the supermarket that exchange your coins for bills -- have hampered coin circulation. Since the U.S. Mint went into overdrive to end the coin shortage, White says, about 40% of the coins that it has produced have been pennies.
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Is It Time To Kill the Penny? More

Is It Time To Kill the Penny?

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  • Past time (Score:3)

    by meerling ( 1487879 ) on Thursday July 16, 2020 @09:42PM (#60298623)
    It's long past the time to get rid of it, and the mint has been trying to dump it for decades now.
    However, the guy that sells them the blanks sheets for the cent coins has been paying off the politicians to prevent the mint from dropping the cent.

    Remember, the mint has to follow the rules from congress, and that even includes what security features they want to change or add to the money.
    Congress micromanages them.
    The changes we got a few years ago took a very long time to get the politicians to agree too. Some of the new security features they'd been after for (once again) decades!
    • Whoops. Forgot to mention this:

      To the people wondering how they would handle pricing that goes to cent values, there's nothing to worry about.
      You already pay for certain things down to the tenth of a cent value already, and gas is just one example, and so far nobody has freaked out over that.

      Also anyone that is US military overseas is used to this. That partially copper coin isn't imported to those bases, even though they tend to use US money on them.
      Never had a problem with it, and that has been going on f

      • I donâ(TM)t see much value in the nickel either. Based on the OPâ(TM)s point about the half-cent, weâ(TM)ve already proven we can get rid of anything less than 14 cents without chaos.

        So make the quarter the smallest coin. It still divides every other coin or bill.

        • So make the quarter the smallest coin. It still divides every other coin or bill.

          Making the dime the smallest coin is the obvious choice as then you can just lose a single decimal point.
          The dime is also still a profitable coin to make.
          Personally though, I would prefer that at the same time we do something about the eroding dollar.
          The half-life of the USD is something on the order of 4-10 years.
          This means that the USD is worth half as much every 4-10 years.
          This is ridiculous.

          • That is overstating inflation quite a bit. The dollar halves its value every 30 years or so.

            Check out most any inflation calculator. If you put in a dollar value for 1990, then today it would be worth about double.

            There are sites that show doubling every 4-10 years when compared to a commodity like gold. But that fails to account for the increasing value of gold.

            • So if itâ(TM)s not inflation, what accounts for the price of gold rising faster than the rate of inflation?

              • If we were still on the gold standard, then its price would remain flat. We are not, so it does not.

                Inflation is now based on the average value of goods and services, and those are decreasing in value compared with gold.

      • To the people wondering how they would handle pricing that goes to cent values, there's nothing to worry about.

        It's been done by the rest of the world for decades, see Cash Rounding [wikipedia.org], it's perfectly workable.

        Mind you the rest of the world has also had the metric systems for decades while the US still hasn't managed to adopt it...

  • How Will I Buy Your Thoughts? (Score:4, Funny)

    by zenlessyank ( 748553 ) on Thursday July 16, 2020 @09:48PM (#60298631)

    Without a penny?

  • Thirty years ago was about when the very last thing you could buy for a penny disappeared (penny gumballs). Even then, these were only run for charity purposes -- they required tax-free status and volunteer labor to be profitable. For a while after that, charity penny jars were popular with charities, but those STILL required volunteer labor and tax-free status, with the addition of it being a pure donation rather than receiving product in exchange.

    Arguably we should get rid of the nickel too. It is physica

    • The paper dollar needs to be entirely replaced with the dollar coin. It costs way too much to replace paper dollars given how much physical wear they receive, while dollar coins are much more durable and would not have to be minted as much.

      Yup, agreed. This makes sense due to the longevity of coins.

      We also need to bring back the $500 bill...

      Wait, what's this nonsense? I was with you regarding coins, but this is just stupid. How many $100 bills are even being used in circulation today? And when I say "being used", I mean by someone other than banks. Electronic transactions dominate today, and that's likely only going to increase. The end goal is to stop wasting taxpayer dollars at the US Mints. Print solutions that justify the demand, not simply based on what a bill or coin is "

    • We'll never get to have dollar coins that don't completely suck until they come up with a way to make them UNMISTAKABLE for quarters. Like, make them dark copper-colored. If they can fabricate a striped light-dark-light-dark alloy (by squirting side by side stripes of molten metal from an array of nozzles to make the blanks, maybe), that would be even better. Or maybe a dark brown coin with a hole in the center.

      Then, make a $2 coin with dark outer ring, and light inner ring (like Canada's).

      To increase accep

  • It's time to deflate the currency so the penny is worth having again. Runaway/compounding inflation is a serious issue. When it's so bad you consider getting rid of your lowest-denomination currency you're clearly on the path taken by Zimbabwe.

  • ... killing the $1 and maybe $5 dollar bills? Replace those with coins. I suspect that the life of a bill is much shorter than a coin. Particularly after running them through a few washing machines. And the hard surface of coins can be disinfected much more easily.

  • Here in Canada we ditched the penny years ago. We also ditched paper $1 and $2 bills for coins. Nobody misses any of them. The rounding rules were specified by the Feds and everybody follows them.

    ...laura

    • Many countries went even further and ditched everything up to the minimum value where you can buy anything useful, typically around 1/10 the value of the larger denomination, e.g. dollar. Except for the EU, with its insanity-inducing faffing around with 1-cent, 2-cent, and 5-cent coins on every fscking transaction.

      Mind you at some point it'll become a moot point due to the use of cashless transactions. I can't remember the last time I made a cash transaction, and that's not just going back to last week,

      • Mind you at some point it'll become a moot point due to the use of cashless transactions. I can't remember the last time I made a cash transaction, and that's not just going back to last week, it's going back to the start of the year.

        Me too... thanks to Covid-19 most of the businesses in the land of Oz don't take cash anymore.... but spare a thought for your local drug dealer! he's really going to struggle in a cashless society...

        • spare a thought for your local drug dealer! he's really going to struggle in a cashless society...

          If you know someone who will sell me weed for pennies could you get in touch? Purely, uh, for informing myself.

  • They will have to remake all of the paid for TV advertisements.

    [sarcasm intended]

  • Donald Trump won't be able to tip anymore.

  • The root cause of the "penny problem" is the fact that the value of the dollar has been declining for over a century. Sometimes at a quick pace, sometimes at a slow one, but the trend is undeniable. At the centennial of the Federal Reserve, the purchasing power of the dollar had declined to about 10% of what it had been when it was founded. The half-life of the purchasing power of the dollar is something like 30 years.

    Too many people benefit from the printing (and coining) of that money, and its account

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