Time to get rid of the Penny
Modern American pennies are Copper-plated Zinc in which the copper content is only 2.5%. About 182 pennies weigh a pound, so copper, at $3.40 a pound and zinc at $1.25 a pound means our pennies cost 1.30 a pound to produce or about 7/10ths of a cent. Taking the cost of 6/10ths of a penny for manufacturing it thus costs the US mint about 1.3 cents to produce each penny (1). Not a good business deal for American taxpayers, is it?
It has been suggested that we make steel pennies as we did during World War Two. However, even at 25 cents a pound for steel, it costs more to handle steel than zinc and in the end the mint would still be spending a little over one cent to make each penny.
Perhaps now would be a good time to do away with the penny altogether and round everything up to the nearest nickel for retail purchases. Banking and accounting can still use micropennies as they do now but when actual cash is handled the nearest 5 cents should be rounded up.
Very few people realize that a dollar's worth of old (1981 or before) Lincoln pennies is worth over $1.60 melted down. However the Feds have made it a crime to melt down pennies and nickels (2) to exploit the difference in metal values.
The sign, seen here at a convenience store in rural Nevada says, "If you need a penny, take one. If you have an extra penny, leave one. If you need more than one - get a job."
If zinc and copper prices continue to climb it will soon be cheaper to make pennies out of chocolate than metal. At least this way you can enjoy yourself while our government fritters away our tax moneys.
Congress has tried twice before to eliminate the penny but it never got anywhere:
2002: United States Representative Jim Kolbe of Arizona proposed The Legal Tender Modernization Act but the bill failed in both houses and died when the 107th Congress adjourned.
2006: Same Congressman introduced the Currency Overhaul for an Industrious Nation (COIN) Act) but it too died.
One of the reasons for keeping the penny is the fear that charitable causes might suffer since they rely on donations from the collection of pennies. This is the stupidest thing I've ever heard. Charities would make even more money if the penny were eliminated. Think about it - when kids with those canisters to support local Little League or Leukemia come up to your car, instead of throwing in a couple of pennies, people would be forced to throw in nickels. A five fold increase.
Another reason is the fear that rounding up would work against the consumer. Sadly this fear is based on ignorance. In millions of transactions there will be about 50% rounding up and 50% of rounding down resulting in almost no advantage for the retailer. Of course if you pay by credit or debit card, you will pay the exact amount in cents without rounding.
And by the way, getting rid of the penny will free up a slot in retailers' cash drawers, which could help facilitate the adoption of dollar coins. The Fed estimates that the country could gain over $500 million annually by the switch to a dollar coin. I would like to see the simultaneous elimination of the penny and the paper $1 bill.
If Congress would only get down to the business of saving money instead of building $320 million bridges to nowhere, we could have enough money to fund border security. Why do we keep electing these idiots? Just my two cents.
Coin Cost* Redesign Penny 1.23 cents 2009 Nickel 5.73 cents 2006 Dime 2.99 cents 1946 Quarter 7.03 cents 1999-2008 Sacajawea Dollar 15.89 cents 2000
*Estimated cost at the end of 2006
The United States Mint Pressroom, United States Mint Moves to Limit Exportation & Melting of Coins
Specifically, the new regulations prohibit, with certain exceptions, the melting or treatment of all one-cent and 5-cent coins. The regulations also prohibit the unlicensed exportation of these coins, except that travelers may take up to $5 in these coins out of the country, and individuals may ship up to $100 in these coins out of the country in any one shipment for legitimate coinage and numismatic purposes. In all essential respects, these regulations are patterned after the Department of the Treasury's regulations prohibiting the exportation, melting, or treatment of silver coins between 1967 and 1969, and the regulations prohibiting the exportation, melting, or treatment of one-cent coins between 1974 and 1978.
The new regulations authorize a fine of not more than $10,000, or imprisonment of not more than five years, or both, against a person who knowingly violates the regulations. In addition, by law, any coins exported, melted, or treated in violation of the regulation shall be forfeited to the United States Government.