DarkWaters Posted September 27, 2006 Report Share Posted September 27, 2006 I found this op-ed on the existence of pennies in the United States to be particularly amusing. It mentions some interesting estimates, such as how it is believed that fabricating one penny costs about 1.4 cents. About two months ago, U.S. Representative Jim Kolbe (of Arizona) introduced a bill that would eliminate the penny. Who on K street seems to be opposed to him? Why the lobby Americans for Common Cents, a pro-penny lobby partly funded by the zinc industry! Eliminating the penny sounds like another simple, common sense reform that would reduce wasteful government spending. Quote Link to comment Share on other sites More sharing options...
konerko14 Posted September 27, 2006 Report Share Posted September 27, 2006 How can you get rid of the penny? Can the government just say, "The penny is no longer worth anything." And thats it? Quote Link to comment Share on other sites More sharing options...
Vladimir Berkov Posted September 27, 2006 Report Share Posted September 27, 2006 How can you get rid of the penny? Can the government just say, "The penny is no longer worth anything." And thats it? I would guess that cash transactions would be rounded off and electronic transactions would still use virtual "cents" even though no real pennies would exist. The problem is really just a symptom of a country which has gone off the gold standard and uses monetary policy as a political policy. Give it enough time and we will have to talk about getting rid of nickels and dimes as well. Quote Link to comment Share on other sites More sharing options...
Inspector Posted September 27, 2006 Report Share Posted September 27, 2006 How can you get rid of the penny? I would think the first step would be to stop minting them. Quote Link to comment Share on other sites More sharing options...
Ogg Posted September 27, 2006 Report Share Posted September 27, 2006 This annoys me, because the assumption that people seem to make is that making a penny is somehow a waste. This is not the correct conclusion to draw. If a penny were used only once in its lifetime, that would indeed be a bit of a waste, but picking a random penny off my desk yeilds a date of 1982. Since 1982, how many times do you think this penny has changed hands? How many transactions has it facilitated? Probably dozens. That penny has not registered as one cent in our total spending, but as several. But even if it was wasteful, it does nothing to solve the underlying problem. Even if the penny were eliminated, and everything was rounded to 5 cents one way or the other, inflation would, in short order, make the creation of the nickel cost more than 5 cents! I recently read an article by Leonard Peikoff on Ayn Rand's thought process; she thought not in terms of concretes but rather in terms of principles. It is quite obvious that lawmakers today (As well as most of the population) do not think in terms of principles. They do not think 'The creation of a penny is wasteful. Why?', they think 'The creation of a penny is wasteful. Let's scrap it!' Ignoring, of course, the reasons why it's wasteful, and ignoring the possibility of this situation again in the future. Do not treat the symptoms, eliminate the cause. Why was the making of a penny not wasteful before now? Why did that change? Inflation is the root cause (Just as it is the cause of many other woes that those of perceptual consciousness cannot seem to imagine a cause for). Even if the government had any right to the functions of the Treasury Department, I would be sickened by the lack of thought that goes into its workings. Quote Link to comment Share on other sites More sharing options...
Vladimir Berkov Posted September 27, 2006 Report Share Posted September 27, 2006 Indeed. Sacagawea dollar coins anybody? Quote Link to comment Share on other sites More sharing options...
DarkWaters Posted September 28, 2006 Author Report Share Posted September 28, 2006 How can you get rid of the penny? There is no need to dispose of pennies. I had this hilarious image of refuse collection trucks dumping a cornucopia of pennies into the ocean. As Inspector said, the government should just stop minting them. This annoys me, because the assumption that people seem to make is that making a penny is somehow a waste. This is not the correct conclusion to draw. If a penny were used only once in its lifetime, that would indeed be a bit of a waste, but picking a random penny off my desk yeilds a date of 1982. Since 1982, how many times do you think this penny has changed hands? How many transactions has it facilitated? Probably dozens. That penny has not registered as one cent in our total spending, but as several. But even if it was wasteful, it does nothing to solve the underlying problem. Even if the penny were eliminated, and everything was rounded to 5 cents one way or the other, inflation would, in short order, make the creation of the nickel cost more than 5 cents! The penny on your desk that was minted in 1982 might have been worth it, but the additional pennies being minted today probably are not given the cost to produce them. I would not go as far to say that it would immediately follow that the cost of minting a nickel will exceed the value of the nickel itself due to economies of scale, but you do have a legitimate point about inflation being the culprit behind all of this. Quote Link to comment Share on other sites More sharing options...
Ogg Posted September 28, 2006 Report Share Posted September 28, 2006 (edited) The date doesn't matter. Even pennies created now will be passed though dozens of hands in dozens of transactions before they become too worn to use again. The 1 cent 'value' of a penny has no relation to its impact on the economy, unless put in terms of the velocity of money in the economy as a whole, although the number of times a penny is used in its lifetime may be decreasing. I don't know all the facts involved. I also don't know the number of pennies currently in circulation. But I do know that those facts would need to be taken into consideration, and the fact that it costs more to make a penny than what it is 'worth' is completely immaterial without that context. Edited September 28, 2006 by Ogg Quote Link to comment Share on other sites More sharing options...
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