Who among us enjoys change? I’m not talking about the change of the seasons or the lunar cycles, I’m talking about hard cash, coins, specifically pennies.
Pennies, for all their nifty shine and their copper coat, fail the most basic principles to be considered currency.
The Washington Post reported that the cost of producing the copper coin (it’s only 2.5 percent copper) in 2014 once again exceeded its market value. The same was true of the nickel, the penny’s chunkier, slightly more valuable cousin.
This means that pennies — and nickels — are not even really worth their respective values as currency. If one took the 2.5% copper and 97.5% zinc and melted it down, the base components would be worth roughly 2.41 cents. That’s almost a 150% increase in value just based on the value of the coin’s base materials. This might not seem like much, but when the value of the metals in a coin outweigh its market value, it leads to mass wastes of money and resources.
According to the U.S. Mint, the government spent nearly $169 million in 2013 just to put $70 million of pennies into circulation. The disparity between the actual monetary worth of the penny and the value of the zinc and copper inside has even led to concerns that people would stop using the coins as money and start to melt them down for the raw materials.
According to USA Today, instead of letting their citizens help themselves by getting a useless currency out of circulation and making a quick profit, the United States has banned the melting of U.S. currency, meaning that unless someone wants jail time they won’t be helping the anti-penny cause.
All that excess currency might has well been thrown out of a window or into a furnace for all the economic sense that it makes.
To all the Lincoln lovers who want to honor Abraham Lincoln by keeping the penny, (completely ignoring he is on the five dollar bill) Abraham Lincoln wouldn’t be proud, he would be brutally ashamed to be featured on a coin “valued” at one one-hundredth of our base unit of currency and worth more in raw materials.
Another problem with pennies is that they are a pointless medium of exchange. As we all know, currency is just a tool we use to exchange items without having to lug around said items at every exchange. Currency saves us time and effort by allowing us to trade smaller items at a set value that can later be used to trade for other things. The problem with pennies is that nothing can be bought or exchanged in this day and age with one one-hundredth of a dollar, making the penny even more useless and obsolete.
There is a single simple and easy solution to this entire penny pandemic, and it comes in three steps.
Step 1: Stop the production of pennies.
Step 2: Repeal Section 331 of Title 18, the bill which criminalizes the melting down of U.S. currency, and recall pennies from circulation.
Step 3: Round all costs to the fifth cent, eliminating the need for a penny entirely.
Before you say this will lead to a drop in donations, taxes, and income, think again. Canada and Australia repealed their respective one cent coins and donations, taxes, and income stayed level. Along with that fact, their economies actually improved drastically after the transition and destruction of the currency that was holding them back.
The real question is, why haven’t we done the same ?