Pennies: Keep Them Or Lose Them?

[DistressedAmerican]

Thoughts on the need for the penny?

Some fodder for you:
http://money.cnn.com/2006/07/18/news/penny/index.htm

Kill-the-penny bill introduced
Citing spiraling zinc costs, Rep. Jim Kolbe continues his quest to eliminate the 1-cent piece.
By Christian Zappone, CNNMoney.com staff writer
July 18 2006: 2:19 PM EDT


NEW YORK (CNNMoney.com) -- Representative Jim Kolbe wants to do away with the penny - and for a second time has introduced legislation that would effectively kill it.

The Currency Overhaul for an Industrious Nation (COIN) Act would force the rounding off of all cash transactions to the nearest 5 cents, making the penny coin useless for everyday transactions.


Representative Jim Kolbe

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The move is in part a reaction to the rising cost of zinc - the penny's main ingredient - which at current prices brings the cost of making the coin to 1.4 cents each.

Kolbe introduced similar legislation in 2001 when prices for metals weren't as high. The bill failed to pass or even to make it to a floor vote. Since then, however, zinc costs have nearly doubled.

"The penny has been a nuisance for years," said Kolbe (R-Arizona) at a press conference on Tuesday, "but now that the cost of a penny exceeds its value, the landscape of the debate has completely changed."

Over half of the U.S. Mint's coin production comes in the form of pennies. At current prices, the Mint would spend some $44 million producing pennies this year, nearly $14 million more than in 2005.

As with the 2001 bill, the new one calls for rounding down any cash transaction that ends in in 1,2,6 and 7 cents; totals ending in 3,4,8, or 9 cents would round up.

-More at link-

[XemaSab]

1. I feel like losing the penny

Would lead to inflation and provide yet another way for the man to screw us over.

You know in any "rounded off to the nearest 5 cents" transaction the working man would get the shaft.

[flowomo]

2. many things would go up in price 1-4 cents....

retailers will round all those 3.99 items to $4.... and when sales tax brings an item to, say, $2.91 -- it'll go to $2.95. Just something to keep in mind.

[sgxnk]

20. doubt it

the logic of the 3.99 prices is that it sounds cheaper than 4 dollars

so, imo they would be more likely to lower to 3.95

i think your logic is flawed in that the whole point of the 99.99 type prices is that they SOUND cheaper by a greater margin than they actually are

4 dollars sounds more than a cent more than 3.99

or something :l

[Robb]

3. What the hell?

As with the 2001 bill, the new one calls for rounding down any cash transaction that ends in in 1,2,6 and 7 cents; totals ending in 3,4,8, or 9 cents would round up.

Dubious merits of this whole plan aside, whatever the fuck happened to rounding the way the REST of the world does it? :wtf:

[RoyGBiv]

7. Nearest nickel ...

That would be the way the rest of the world rounds things. It's just that when we generally think of rounding numbers, we think in terms of the nearest tenth, or zero number.

For one and two cents, the nearest nickel is the lower zero number. For the six and seven cents, the nearest nickel is the lower "five" number, e.g. 2.01 or 2.02 = 2.00 / 2.06 or 2.07 = 2.05. Apply similar logic to rounding up for 3,4,8, and 9.

Whatever the case, the plan is dubious. I don't want to go into the math, because it's complex and makes my brain hurt, but on average, due to taxes and the way retailers will likely price things, on average items will go up 1 cent per dollar. It's almost like an additional tax.

[Crandor]

8. what's wrong with that?

1 => 0 (down), 2 => 0 (down), 3 => 5 (up), 4 => 5 (up), 6 => 5 (down), 7 => 5 (down), 8 => 10 (up), 9 => 10 (up)

[me b zola]

4. I voted for keep the penny for a selfish reason...

...FREE MONEY

Other people hate pennies and find them an inconvience so they throw them on the ground. Me, I pick up those pennies and fill up a jar until they become $$. I don't get rich off of pennies, but there is just something spiritual to me about turning what is discarded by others into something for me.

[cynatnite]

5. I used to think my mom was nuts for picking up pennies...

no more.

[CountAllVotes]

26. actually a penny is worth about .02 cents just to make

Sure, they'd love to be rid of it. It costs more to make a penny than a penny is worth.

Keep the penny yes! It is a great thing to have and some coin collectors really value them.

Remember the old Indian head pennies?

:)

[Viva_La_Revolution]

14. spiritual my butt!

that's the emergency fund! at least in our house. :)

[me b zola]

19. emergency fund for me too

..but ya gotta admit there is something special about the magic of turning someone else's discarded coins into cash for me. Jesus did loafs and fishes, I do pennies:P


edited to say, if I lived out in the country, I'd work on turning water into whiskey ;)

[sandnsea]

6. Just forget what real money is

That a penny used to buy a piece of candy or that 5 of them bought a stamp or ten of them a phone call.

Yeah, they would love for Americans to forget the value of a penny and a dollar and just believe money never did buy much.

[Crandor]

9. we've abolished a denomination before...

There used to be a half-cent coin, until it was abolished in 1857. At that time, it was worth the equivalent of about 10 cents in 2006.

[Gato Moteado]

10. heat them up to about 1000 degrees with a bunson burner.....

...and then drop them on the sidewalk in front of freepers and watch the fun.

[Jack_DeLeon]

11. No more new pennies, but no rounding, keep them legal tender.

Personally I would not mind it if the mint stopped making pennies but I do not think things should be rounded up or down.

Pennies should be kept in the transaction even if its only in the way that 10ths of a cent are included in gas purchases. That way when you buy multiple items you arent charged a few cents more for each one, but only a cent or two more for the final total. Also if someone has the exact change then they should be allowed to pay it instead of to the nearest 5 cents.

[Name removed]

17. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Commie Pinko Dirtbag]

23. OK. How the hell THAT elicited a Deleted Message? The mind boggles. -nt

[RoyGBiv]

12. As is typical ...

This current move to get rid of the penny is less about the penny than it is about making money for a few corporations. It also has some national security issues that this article doesn't address directly at all.

As noted in the article, Arizona seeks to benefit from making the nickel the lowest demomination of coin because they are made primarily of copper.

Kolbe's home state of Arizona is the largest copper producing state in the nation. Copper is the main material of the nickel which would benefit by becoming the lowest denomination of currency in circulation.

This is partly correct. The nickel would benefit to some extent for those transactions that would result in a nickel being given as change rather than pennies, but these wouldn't be much more common than they are today. Instead of giving 3 or 4 cents in change, we'd get a nickel. Then again, while we were getting 16-19 cents in change, which already requires a nickel, we would with this plan be getting either 15 cents or 20 cents, which in half the transactions in this range would result in a nickel not being used.

However, unstated in the article, dimes and quarters are also primarily made of copper, so the benefit to Arizona is increased, just not precisely for the reasons cited.

Also in the article:

Kolbe's bill also takes aim at Massachusetts-based Crane Paper, which has been the exclusive supplier of paper to the Bureau of Engraving since 1879. Crane has benefited from legislation requirements that effectively makes it the only possible supplier of the paper.

This is a national security issue.

Mr. Kolbe suggest this is just protectionism and strikes at the heart of the free market economy. According to Kolbe, different companies should be able to bid for contracts (hey, maybe even Halliburton) to produce the paper, and those companies wouldn't even have to be American owned. The paper would have to be *produced* in the US, but this says nothing of ownership, and neither does it say anything about allowing multiple companies to produce the paper. I am not very comfortable with the idea of a foreign company controlling the production of the paper that produces our currency, and no one concerned about the integrity of the currency supply should be. Crane Paper has been given this contract as the sole suppplier for a reason. It does it well and manages to maintain tight control of the recipe for creating the paper. This is not the kind of job you want spread around to different countries or even different companies with different standards and different manners of doing business. You don't, for example, want this job going to a company that might have a history of problems with employee relations, inspiring one of them to steal the paper or release the recipe for creating it, not that this would be easy in a properly controlled environment, but again, with one company doing it, controlling that environment is much easier.

So, anyway, rail on the penny if you like, but read the fine print.

[NYC]

13. When pennies are gone, nickels will become the nuisance.

When will they stop?

I think it is a sign that our money is losing value if we start eliminating the lower denominations.

[Pab Sungenis]

22. I've made the case that eliminating the penny makes the DIME the base coin

...because Americans think in terms of fractions, not multiples, when it comes to money.

Think about it: Canada has the same basic currency system we do (until you get to the two dollar coin) but everything is in multiples of one cent. They have a 25-cent piece. We have a Quarter Dollar. They have a 50-cent piece. We have a half dollar.

Americans already treat the nickel as a half dime. (Heck, before 1866 it WAS a silver coin called the half dime.) People will start thinking in terms of dimes and half dimes, and prices will start adjusting themselves up accordingly.

[Samurai_Writer]

24. Canada doesn't have pennies

I was there 7 years ago, and the lowest coin you could get was a canadian nickel.

[Pab Sungenis]

29. Yes, they do have them.

I was there three years ago, and they were still in use. And they're still manufactured today.

The Canadians have a use for a coin worth LESS than our cent, and we Americans can't stand ours?

Edit to add: http://en.wikipedia.org/wiki/Penny_%28Canadian_coin%29

[Samurai_Writer]

31. Well that's wierd

Because when I was there, everything was either rounded up or down to the nearest nickel, and there weren't any pennies where I was in British Columbia.

[Pab Sungenis]

32. Maybe a regional thing.

Maybe they don't circulate well out west. Or you were pegged as an American and got ripped off.

[Samurai_Writer]

33. Not the second one

I watched closely when I was in stores. No one used them. And my friend who I was visiting didn't use them either.

[NYC]

27. That's even worse.

I vote we keep the penny.

[Name removed]

15. Deleted message

Message removed by moderator. Click here to review the message board rules.

[charlie]

16. Sales taxes in 5 cent increments only

No thanks.

[Endangered Specie]

18. you know what, screw all this paper and coin, I want my fucking GOLD back!

am I the only one here who thinks not having a gold (or some other) standard is a very bad idea?


(btw, if gas companies are gonna charge 9/10's of a cent they should be forced to make tenth cent coins, or round down the prices).

[trotsky]

34. You and a few libertarian armchair economists, maybe.

The big problem with the gold standard is that it chains your economy to a fixed money supply. It's very difficult for an economy to grow effectively. Plus, once you have a slight downturn, people start hoarding the money/gold, choking the economy further when what it really needs is more money. When you use fiat currency and Keynesian monetary policies, you have weapons to fight these downturns (as well as stave off inflation). Not surprisingly, no country that dropped the gold standard has experienced a depression.

http://home.att.net/~resurgence/L-gold.htm

[Pab Sungenis]

21. Keep it, but....

...make it smaller (like the Eurocent) and add a two-cent piece ("tuppence?") back into the mix so there's not as much demand for pennies when making change.

[WI_DEM]

25. Keep it! because if we lose the Lincoln penny the Repukes will insist

on a Reagan something or other.

[RB TexLa]

28. get rid of all currency

criminal activity is the only purpose is serves anymore.

[lectrobyte]

30. Once they get us on the cashless plan, we won't have to worry about

pennies. Or nickels. Or dimes.