A penny for your thoughts

Here are mine, for free 🙂

On my way in to work this morning, I was briefly stuck behind a Geo (Metro? Prizm?), and I remembered back when I was in college, and these cars were new. And tiny. And affordable. And not so fast with their 3-cylinder engines. We called them Penny Racers.

Which made me think about pennies, and how useless they are, and how I’ve heard that it costs more than a penny to make a penny, which is just plain dumb. I also thought briefly about Making Money, which makes hilarious fun of this (and which I haven’t finished reading yet).

In fact, older pennies (when they were mostly copper) are worth more if you melt them down into a chunk of metal than if you keep them in penny form. Which is why the government forbids people to melt 1-cent or 5-cent coins.

So I came across an article, because I can’t give this up now, stating that the price of zinc is rising, and soon the material cost of modern pennies will also be in excess of 1 cent. And it still costs more than a penny to make a penny because of all the non-material costs (equipment, man-hours, energy, distribution…). This article gives reasons for not discontinuing the penny, and the most absurd reason is this:

eliminating pennies would increase our reliance on nickels, which now
cost almost ten cents to manufacture and so generate even more negative
seigniorage, per coin, than pennies do

OK. Bear with me here a moment. It’s not rocket science. A 1-cent piece costs 1.7 cents to make. A 5-cent piece costs 10 cents to make. So here’s what you do: Discontinue the manufacture of 5-cent pieces. Declare that all current 1-cent pieces are now worth 5 cents. Retool the 1-cent dies so that they say “5 cents” instead of “1 cent”. Congratualtions! You no longer have a 1-cent piece, and your 5-cent piece now only costs 1.7 cents to manufacture! Genius!

Why should we stop using 1-cent pieces? We already don’t use them for the most part. I’ve seen people throw them away. I’ve seen people drop them by mistake and not bother picking them up because it isn’t worth the time and effort (and because we are fat, lazy Americans). The frugal among us have a penny jar, and we take it when it gets near full and either roll the pennies and sell them to the bank, or we (as fat, lazy Americans) pay 7% to Coinstar to have them do it for us. Or we leave them in the “have a penny, leave a penny” trays at convenience stores and gas stations. Which is really, in effect, saying “we don’t want pennies to exist”. So it’s time for the government to quit wasting fifty million dollars a year on making pennies.

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