The story of the penny starts in the first
US Mint founded in 1792 which produced these one-cent pieces along with other coins including
the Quarter, Dime, Half Dime and a mystery coin that we'll get back to later. These pennies of the new republic were born
of 100% pure copper. But, two forces conspired to ensure this wouldn't
remain the case for long. The value of copper went up and, because of inflation, the buying
power of the penny went down. This caused The Mint to reduce the amount
of copper in pennies, first from 100% to 95%, and then to only 5% copper and 95% zinc. Despite this debasement, in 2006 the value
of the metal in older pennies rose over 1 cent and suddenly they were worth more dead
than alive so people melted them to sell the raw copper for profit. In a rational, efficient world, the story
of the penny would have ended here with the Government realizing that they weren't worth
Minting and happy that its citizens were removing them from circulation. But, instead the Government made melting U.
S. coins illegal and continues to manufacture 4 million pennies each year. Which is idiotic as it costs the US Mint about
1.8 cents to make a each 1 cent penny. But, even if pennies were minted from something
more representative of their true value -- like plastic or lint -- it wouldn't fix the fundamental
problem that pennies are bad for people and the economy. Here's why: The purpose of physical, cash money is to
make it easy to transact the everyday business of buying stuff. A shopkeeper has stuff and you want that stuff.
Rather than bartering like savages for it, you use cash as a medium of exchange. To get the price just right the cash must
be divisible into pieces so that you don't overpay. But it isn't divided forever, because at some
point the value it represents is too small to buy anything or bother with. Which brings
us back to the penny. In the olden days, pennies could actually
buy stuff, no more. Now, if you want to spend pennies, you're going to have to put in some
effort. For example, try to pay for 20 bucks worth
of groceries with 2,000 pennies weighing 11 pounds and see how that works out. So you have to get rid of them by using exact
change. But, because the United States doesn't include
sales tax in prices -- unlike more civilized countries -- and you can't multiply by 8.875%
in your head, you can't get your change ready before you reach the register like a good
Samaritan would. The pennies you inevitably fiddle with after
discovering the true cost of your goods add two seconds to each cash transaction on average
which is less than the value of your time, and the time of everyone behind you, which
is why most normal people don't bother messing with change and the usual penny-counting culprits
are those with nothing better to occupy their day. If you want to spend pennies without being
an inconsiderate jerk who wastes other peoples' time perhaps you can find a machine that will
accept them. Good luck with that. Vending machines won't
take pennies, neither laundry machines or toll booths or parking meters or anything
else -- because pennies aren't worth the time and effort to count, store and transport them. In fact there is only one machine that takes
pennies: Coinstar -- a leach on the economy that eats 10% of your money while providing
nothing in return except the ability to spend cash that was already yours. The difficulty of spending pennies is why
they end up in jars, dead to the economy after a short, useless life where they failed at
their only job, to facilitate exchange and instead did the exact opposite by being a
literal dead weight on every cash transaction. They must be eliminated. But, you might think, won't prices rise and
charities lose money without the penny? No. New Zealand got rid of their 1 cent coin,
as did Oz. Finland and the Netherlands ditched the 1 euro cent coin as well. Though that
might have been because of how absurdly small and frustrating 1 euro cent is. These countries round to the nearest 5 cents
for cash transactions and none of them saw prices rise or charitable donations drop. And anyway, the United States has already
gone through this process before without trouble. Remember the mystery coin from the beginning?
That was the half-cent. Seen one lately? Of course you haven't. It was discontinued in
1857 for being worth too little. But when the half-cent met its fate, it had
more buying power than today's dime so perhaps the list of modern coins to kill could even
be larger. There is one last, irrational problem with
getting rid of the penny. Everybody loves Lincoln -- well almost everyone.
After booting off Lady Liberty and the Chief, the US sure has Lincoln-ified the penny within
an inch of its life. But ditching the penny won't erase him from
history. Lincoln, and his monument, are still on the
5 dollar bill which isn't going away. And, even if you think it's unpatriotic or
disrespectful to retire Presidential coinage, allow me to direct you to a little organization
known as the United States Military. Where, in overseas bases, they've already
abolished the penny by automatically rounding to the nearest five cents. Sooner or later even the most ardent Lincoln
lovers will have to give up the penny: they cost more to make than they're worth, they
waste peoples' time, they don't work as money, and because of inflation they're less valuable
every year making all the other problems worse. Sorry Abe, but it's time to kill the penny.
As a Dutch person, the speech-bubble at 3:01 made me smile.
(It says: "Thanks for not calling me Holland.")
Finland dropping the 1 cent euro is inaccurate. When we changed currencies we just didn't circulate the 1 cent coins.
What will strongmen bend with their thumbs?!
Wait... the price on the shelf is not the same as you pay? What barbarity is this.
I am just going to point out that if you are like most people you should be getting amazon or other gift cards rather than cash from coinstar machines.
If we abolished the penny, do you know about how much it would save the economy total each year, including time wasted by the consumer to manage the receipt of pennies?
I just rounded this post to the nearest 5 upvotes. I did my part for the economy
Q: How Was Copper Wire Invented?
A: Two Jews Found The Same Penny.
Guess what. NZ doesn't have 5c coins either. If you pay cash, everything is rounded up or down.
However, NZ also has EFTPOS, which is like a debit card but seems to be more prevalent. There are no minimum transaction amounts so you can use it almost everywhere.
Of course if the US was to get rid of pennies and nickels they would have to admit there has been substantial inflation. Sure, it's over 100 years, but people won't see it that way. Personally, I think they should just stop minting them and slowly take them out of circulation as they get damaged.
oh yeah, seems most places don't have $1 bills either. $1 & $2 coins work pretty well. But that's too much like Europe so it must be communist.
edit: and another thing.
About the whole excuse of tradition, national identity, etc.
The UK changed it's currency in 1971 and the previous currency had been around for a hell of a lot longer than the US has even existed.
Sweden changed the side of the street people drive on in 1967.
Canada changed it's flag in 1965, and so on.
The world doesn't end and people don't start speaking in tongues. It's just not that big of a deal.
I could go into why I think the US has issues with this, but I would probably be preaching to the choir.