10 Reasons We No Longer Need the Penny

pennies

The US one cent piece, or the penny as it’s more commonly known, is due to be dropped from circulation in the year 2020. This marks the end of many years of debate within the United States government over whether to continue to use the coin. Consumers and merchants alike have rallied on both sides of the issue – after all, the penny has been a staple part of currency exchange since its introduction in 1787. It was created by our Country’s founding fathers, specifically Franklin and Jefferson, to help establish a stable currency for the Republic.

So, why eliminate this 200-year old icon when there are still so many things you can do with the penny? In the final analysis, the re

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9 Responses to 10 Reasons We No Longer Need the Penny

  1. Alan says:

    If you get rid of the penney then pretty soon they are going to want to get rid of the nickel and then the dime and so forth which means even more rampant Inflation ala New Zealand

  2. Dick Johnson says:

    As a numismatic researcher-writer I have, for more than a decade, studied the usefulness of future coins. Denominations have changed over the years and centuries since mankind has enjoyed the utility of coins – since 640 B.C. Denominations have been created, when needed, and abolished when not.

    Today we face the elimination of the cent, for the ten reasons mentioned in this article. I have saved articles on this subject, mostly editorials by writers who felt strongly enough to comment in print. The mood has reversed dramatically in that decade from about sixty percent to retain the cent, to currently more than eighty-five percent to abolish.

    This change of opinion has been influenced by the rising cost of manufacturing cents – now costing 2.4 cents for each one cent coin minted – plus the fact that the purchasing power of one cent has diminished so low that most people consider pennies a nuisance.

    Dana O. Crandell’s article is the best I have observed in my decade of studying the subject. The ten reasons mentioned should be carved in stone and sent to every legislator who must make a Congressional decision. They need to make these ten reasons their commandments.

    As society advances, prices rise gradually. A loaf of bread is no longer a dime, and a workman receives more than a dollar a day for his labors, prices evident in America’s past. Also in that past we had a half-cent coin. It was abolished when its purchasing power was next to nil in 1857 (and the cost of its copper increased). Today, 150 years later, the American cent is in that same situation.

    A useless coin, but what to do with over 400 billion cents in circulation? Chicago Federal Reserve Bank chief economist Francois Velde offered the best solution – call them nickels by revaluing them to five cents (he called that “rebasing”) – and let them stay in circulation.

    Since the nickel coin faces the same indignity, my suggestion was to revalue both the cent and nickel to the next highest denomination. A Texas millionaire heard that and squirreled away 20 million nickels in a Dallas warehouse (a million dollars worth!) in hopes of doubling his investment.

    I see a future where we will always need coins – bless the vending machine industry which thrives on coins (and hates changing paper money into coins). Further, of the five coin denominations we currently have circulating today, only the dime and 50-cent coin will survive. New coins of $1, $2 and $5 will replace those abolished to provide an adequate circulating medium in a revised coinage system.

    Prices will be rounded off – if not for individual items – at least the price at the cash register(the “transaction price” or what the Canadians call the “tally price”). Rounding off to multiples of 10 cents will balance out in the end for both buyer and seller. And society advances by not being bothered by low value coins.

    And perhaps 50, or 150 years from now, the dime will have to be abolished. Meanwhile thank you Dana Crandall. You said it better than I could, as well as 199 editorial writers. We have all come to the same conclusion.

    -D. Wayne Johnson,
    Corporate Historian,
    Medallic Art Company.

  3. cce says:

    Though I agree the penny may not be the most useful coin from a currency standpoint (aside from accounting practices), it is a great long-term hedge against inflation. The metal in a coin means there is a base-value to the coin (the coin will always be worth its metal value and face value). A paper bill is worth the paper it is made from, which will not be more than its face value.

    In fact, one could easily make the argument that a coin made of metal is a much more practical and realistic form of wealth than paper money or 1s and 0s in an online bank account.

    The best historical example is gold and silver coins. Due to inflation and rises in commodity pricing, these coins are vastly more valuable than their face value based on their metal value.

    The up-and-coming metal value star in the coin world would actually be the penny. Specifically, the copper penny. It is worth more than 2.5x its face and sells by the pound or ton to copper penny investors throughout the United States. People invest by the pound or ton.

    The second up-and-coming metal value star would be the copper nickel. It’s face value is five cents, so it costs 5x more to obtain. But the metal value (75% copper and 25% nickel) makes it also worth more than its face value.

    So is it worth picking a penny off the ground? I certainly believe it is. After all, that copper penny is a sought-after commodity. And if it’s a newer zinc penny, just wait it out. After all, a combination of quantitative easing, inflation, and global metal demands should boost the value of zinc as well.

  4. Bill says:

    The penny and nickel just add drag to commerce. Canada is dropping the penny and transactions will be rounded to the nearest 5 cents. We should take that one step further and drop the nickel too. Thus on only coinage needed would be the dime, half dollar and dollar. With all that room in the cash registers would finally have room the dollar coin useable.

    Keeping the dime will clam Alan’s fears of inflation.

  5. Gail says:

    I actually like receiving change whether it is a penny or a quarter. I save change all year until yard sale season and that is my ‘spending’ money! Amazing what you can buy for five pennies sometimes!!!

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  7. mariah says:

    slippery slope.

  8. Riley says:

    5 pennies is a nickel, so getting rid of the penny wouldn’t make a difference here. You would still receive change, just not pennies in the change.

  9. lily says:

    yes get rid of the penny

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