Why not stop pretending you have any reason beyond loving pennies? This is not a logical argument.
Do you truly think that pennies (or the lack of existence thereof) play any role whatsoever in international financial transactions?
The reason that the U.S. dollar is so prevalent is that it’s stable – people trust that it won’t suddenly get devalued. How would eliminating pennies possibly affect that? IMO, if anything, getting rid of pennies would make the dollar seem more stable, because it shows other countries that the U.S. actually takes seriously not wasting money making a coin that costs more than its monetary value.
OK, so maybe I like pennies. Nonetheless, I disagree that my arguments are not logical.
Are those international financial transactions in the form of pennies? Almost certainly not; instead they’re either dollar-denominated digital transactions, or perhaps ones involving large numbers of hundred-dollar bills. (Something like 80% of them are held overseas.) So no one, either in the US or overseas, is going to freak out if the penny is eliminated.
This is been my point all along. If the cost of a penny is less than face value then the government makes money on each one. And if people throw them away (remember to recycle) then the government comes out even further ahead.
Maybe only a very, very few will actually “freak out.” However, it is not inconceivable that there would a subtle and perhaps unconscious effect on people’s perception of the U.S. Dollar. It might not be a big effect, but like I said, there may be an alternative that does not cost the government anything.
First, if your idea is to have the government make money, somehow, by minting cheap pennies, well, that’s a thing. I don’t think that minting coins solely for use in general circulation is supposed to be a money-making program (that’s what the special collectibles that the U.S. Mint sells are meant for).
But, beyond that, you’re missing the point that the majority of Americans increasingly find the current penny to be worthless, or nearly so, and they don’t use them when they make payments – any pennies that they get in change go into a jar, or get thrown away. Making them out of a cheaper material doesn’t change that.
I think simply not minting more pennies would work. Keep them as legal tender. Require any business that accepts cash to accept pennies in reasonable amounts (Twenty five or less as in the Canadian law would work). They will eventually stop circulating. The last time I had to deal with Susan B Anthony dollars for example, was several years ago when I found that the local transit ticket machines gave change in them. I tried to pay with some at a local store. The merchant did not recognize them and refused to accept them. It was a fun day.
Actually, this is not entirely true. I really dislike the copper-plated zinc pennies issued since 1982. Not only are they subject to environmental damage that can make them unusable, they are dangerous and can cause health problems if swallowed by a child or pet. We should have switched to the aluminum penny back when it was first proposed in 1974.
One of its "i"s has corroded away already.
In the past, the US has minted half-cent, two-cent and three-cent coins. They no longer do so and the lack of these coins has not affected the value of the dollar in the least. I would expect the same if they stopped minting the one-cent coin.
Trivia about the penny: the obverse has not changed (except for date and mint mark) since the Lincoln penny was issued in 1909. That’s 114 years, which is by far the longest a single side of a coin has remained the same of any coin ever. For both sides being unchanged, I believe the US dime has the record, since it hasn’t changed since 1946. Note that I’m only talking about the design, i.e. pictures and writing, and not the metal the coin is made of.
The mint makes about $100,000,000 in seigniorage each year on ordinary circulating dimes each year and about $100,000,000 in seigniorage each year on ordinary circulating quarters. Sure, this is just a drop in the bucket compared to the mint’s overall budget but it it’s still a significant amount of money.
How does that compare to the losses on pennies and nickels?
Don’t forget about the twenty cent coin. If everyone starts rounding to the nearest 10 cents then it may be time to bring them back. Quarters wouldn’t really work because of the extra 5 cents. Half dollars would work but no seems to like them, at least right now.
About $80,000,000 per year on pennies and about $20,000,000 per year on nickels. Please note that nowhere in this thread have I advocated continuing to lose money on pennies and nickels. My proposal is to reduce the cost of production so that the mint makes money instead of losing money.
I think the US and Canada are the only countries to use a “25” denomination - either in coins or notes. Most currencies use a repeating 1-2-5-10-20-50 series (adding zeros when needed, and sometimes eliminating the 1 and/or 2). When I visited the USSR in 1987, they had 1, 2, 3, 5, 10, and 15 (and up) kopeck coins - meaning you only needed one coin for small transactions (e.g. bus was 2 kopecks; tram was 3; metro was 5).
It turns out this isn’t the case. We had a thread on this a while back:
Normal Americans who arent wedded to an anachronistic worthless coin. The current penny is worth less than the mill “coin” when it was briefly used. The mill was worth about 2 cents.
The penny back in 1900 was worth more than a quarter today.
No need to do that. Just stop minting them.
Right.
They used to use the old Pound Shilling Pence model. I think that money is no longer legal tender.
We stopped minting the half cent and no one in the international community blinked.
Sure, so if the mint stops making them, you will still have millions of them to play with.
Post-Confederation (1867) Canada never used pounds/shillings/pence as its official currency (individual provinces did in earlier years). Decimal coins were minted as early as 1858 in 1, 5, 10, 20, and 50 cent denominations. The next major minting was in 1870 when the 20c coin was replaced by a 25c coin. Paper money was issued by individual banks and the “Dominion of Canada” until the Bank of Canada took over around 1935.
Hell, I’ll send a few if you’d like. I literally throw them in the trash when I empty out my pockets when doing laundry. Sometimes a nickel will make its way in there, too, if I’m feeling lazy. I’m happy to call myself a “penny hater,” but it’s more like being puzzled as to why the damned thing still exists. Nobody in foreign markets would give a shit if we got rid of it. As mentioned in this thread, this happens to currencies not irregularly.