Should the US eliminate the penny?

[croat]

http://money.cnn.com/2013/02/04/news...html?hpt=hp_t3

Canada is dropping the use of its penny today. And some economists believe the United States should be following its neighbor's example.

The U.S. Mint spent 2 cents to produce and ship each of the 5.8 billion pennies sent to banks last year. But in addition to being a money loser for the Treasury, there are arguments that the penny has simply outlived its usefulness.

Greg Mankiw, Chairman of the President's Council of Economic Advisers under President Bush, said American consumers have shown they don't value the penny, even if most polls show opposition to getting rid of the coin.

"When people start leaving a monetary unit at the cash register for the next customer, the unit is too small to be useful," he said.

Related: The search for the cheaper penny

Businesses say rounding to the nearest nickel would save time for both their cashiers and their customers. But they're reluctant to push for a change that could spark a backlash. That's exactly what happened last summer when Mexican food chain Chipotle (CMG) started rounding at some of its high volume stores.

"Yes it would speed up transactions, and yes that is good," said Jeff Lenard, spokesman for the National Association of Convenience Stores. "But if it's a convenience that the customer doesn't want, we're not going to question the consumers' decision."

Advocates for keeping the penny include Americans for Common Cents, a trade group supported by Jarden (JAH, Fortune 500), which has a subsidiary which makes the zinc and copper blanks turned into pennies by the Mint. The group commissioned a poll last year showing that two-thirds of Americans want to keep the penny. It often cites a study by Penn State economics professor Raymond Lombra that estimates that consumers would end up paying a "rounding tax" of $2 billion to $4 billion over the course of two years if the penny is eliminated.

Related: Kill the dollar bill for $1 coins instead?

But Robert Whaples, an economics professor at Wake Forest, has done his own study looking at thousands of convenience store purchases. That study shows consumers as a group would break even if stores rounded to the nearest nickel. He said so many pennies fall out of circulation each year because consumers don't see them as valuable, raising both the costs to the Mint as well as the economy as a whole.

"The main argument against the penny is that it wastes our time," he said. "We're clearly losing money on the penny."

Besides Canada's example, other countries have dropped their lowest denomination coins without problem.

But Whaples conceded that killing the penny is unlikely since the public isn't eager to give up the coin.

"The vast majority want to keep a penny, regardless of all the good arguments against it," he said. "It's a sentimental attachment." To top of page

[dixiedawg]

At least it's worth a penny, other coins are not worth their face value today.

I really don't care, drop it, keep it, but saving them, even if just for the copper, is good to do.

I'd rather we quit giving money to other countries, quit funding the UN, and eliminate other waste, before we raise taxes on anyone.

[dixiedawg]

The value of the copper in a penny, is almost 2.5 times it's face value. So if you got a million pennies for $10 grand and melted them down, you'd have $24,000.00 in copper.

[dixiedawg]

I can see people eying up there polar water bottles full of pennies right now

[csowers]

Originally Posted by dixiedawg

At least it's worth a penny, other coins are not worth their face value today.

I really don't care, drop it, keep it, but saving them, even if just for the copper, is good to do.

I have been saving older pennies for the copper for a while now. I think each penny is worth about 3 cents in copper value. The year range is anything through 1982.

[BondiBlue]

I vote yes, get rid of it. I never use actual cash. It's much easier/more convenient to use credit/debit.

[SpaceJeep]

The Government ain't stupid. I don't recall the year but I think its the mid 80's, the copper content of a Canadian penny is worth about 2.5 cents today so when people start cashing in their pennys the Government stands to make a killing when they melt them down.

I guess we will start to see odd prices like $1.93 and $2.23 so that when taxes are added in the final price will be a multiple of .05 cents.

[croat]

I do recall companies that went away with the pennies rounded down, not up.

[SpaceJeep]

I've been told that many retailers may not even change the pricing. I think it will work like this:

After the taxes are added and the total is .01,.02,.03 &.04 it will round down and if its.06,.07,.08 &.09 it will round up to the nearest nickle.

[jaybee]

NO. 01, 02 06 and 07 will round down. 03 04 07 and 08 will round up. This is the official and international standard.

[croat]

[SpaceJeep]

Originally Posted by jaybee

NO. 01, 02 06 and 07 will round down. 03 04 07 and 08 will round up. This is the official and international standard.

Oh okay I stand corrected-again!!

[Metaxa]

You have to get older pennies to get the copper...they are just copper plated metal for some years now in both countries.

too much hassle but there is money in dimes if you have loads of free time.
Lots of silver dimes still in circulation so what some folks do is buy rolls and rolls of the dimes, open them and pull the silver ones. Lined up in a stack for rolling you can immediately see the pure silver ones.

Re-roll the regular ones and put the silver ones aside for sale.

I prefer my taking the gold pans with me when I go camping personally, I can't see sitting at the kitchen table un-rolling and re-rolling many 100's of dime rolls for a hundred bucks...but each to his own.

[todde702]

Funny this came up now. I was just talking about this the other day with a friend. With the gov't trying to cut costs everywhere, it only makes cents (see what I did there?) to eliminate the penny. All I ever do is chuck my pennies in a bucket.

[croat]

I've been looking for silver dimes for years now, not one found in loose change. Silver quarters on the other hand, found quite a few of them and worth way more than a dime.

Originally Posted by Metaxa

You have to get older pennies to get the copper...they are just copper plated metal for some years now in both countries.

too much hassle but there is money in dimes if you have loads of free time.
Lots of silver dimes still in circulation so what some folks do is buy rolls and rolls of the dimes, open them and pull the silver ones. Lined up in a stack for rolling you can immediately see the pure silver ones.

Re-roll the regular ones and put the silver ones aside for sale.

I prefer my taking the gold pans with me when I go camping personally, I can't see sitting at the kitchen table un-rolling and re-rolling many 100's of dime rolls for a hundred bucks...but each to his own.