Much-Maligned Penny Sticks Around
A longtime reader of these ramblings recently mailed me a newspaper clipping of a column I wrote nearly 20 years ago. He read it while working for Amtrak in Pennsylvania as a locomotive engineer on the Philadelphia to Harrisburg run. He stopped to grab lunch and bought a copy of the Harrisburg Patriot-News, which ran the column, originally written for the Nacogdoches paper. I was advocating that the United States get rid of the penny because it is a nuisance, cost more to produce than it’s worth, and doing so could help cut the deficit.
The reader, Joe McCarthy, and I have exchanged correspondence for years. He clipped and kept that column, found it a few weeks back and was kind enough to mail it to me. After retiring, Joe moved to the Dallas area, and we still keep in touch. He is quite a storyteller himself. We plan to meet next time I’m in the Metroplex for lunch or coffee.
As for my impassioned crusade to get rid of the penny, we all know how well that turned out. Convenience store counters still have “Take a Penny, Leave a Penny” trays. Most of us still toss the coins in drawers, and many of us — including me — consider it bad luck to not pick up one found on the street. After all, the profile of Abraham Lincoln — our greatest president, at least in my view — graces that coin. That is probably one reason the penny shows no sign of becoming extinct. Since President Obama once held the senate seat occupied by Lincoln, I’m betting he isn’t enthusiastic about striking that coin.
My argument back then, besides the cost savings, is that transactions could simply be rounded up or down. That problem has largely taken care of itself, for two reasons. First, the number of transactions completed with cash has plummeted since that piece was written, about midway through Bill Clinton’s first term. Credit and debit card use has skyrocketed. Second, if you don’t have a penny, about 90 percent of the time the cashier will grab one out of the tray or off the till’s counter. It is rare that a $2.01 sale will result in someone handing you back 99 cents in change these days.
Plus, if you cut out the penny, than the next least-valuable coin becomes the nickel. The United States loses 6.2 cents on each nickel it produces, about five times as much as it loses on making pennies. Talk about being penny-wise and pound-foolish. And asking your spouse, “A nickel for your thoughts?” sounds inflationary.
Our neighbors to the north have already ditched production of the penny, which became effective this fall. The Royal Canadian Mint says it will save $11 million — presumably in Canadian currency annually — by doing so. Pennies are still legal currency, and I’m sure there are plenty of those Maple Leaf pennies to go around for many years to come.
The fact that Canada has dumped the penny will cause added suspicion. Besides talking funny, Canada is the birthplace of a number of sketchy characters who have infiltrated American pop culture, folks like game show host Monty Hall, actors Lorne Greene and Michael J. Fox and singer Celine Dione. So you have to be careful about what those Canadians are up to. I speak from experience, since my mother’s side of the family emigrated from Sherbrooke, in the Quebec province. We used to visit there when I was young, spending Canadian pennies to buy candy. My great-grandmother, who stood about four-foot-eight and copped an attitude, pretended not to understand English. I didn’t have to pretend I didn’t understand her French.
Maybe we should instill a moratorium on minting pennies and encourage folks to haul those buckets and bins of pennies out of their closets. My extensive research, which consisted of about five minutes on Google, concluded the federal government spent about $118 million last year producing pennies. There are an estimated 140 billion pennies in circulation, which is $1.4 billion. That would appear to be plenty to last us a while, especially if the government established collection points for folks to donate their pennies in order to reduce the deficit. I nominate using post offices, since they’re hurting for money anyway.
I realize saving $118 million a year won’t do much for the deficit, but it is a start. And think how warm and fuzzy we would all feel, having done our small part by cleaning out the coin jar on the dresser of pennies to help out Uncle Sam during these times of fiscal cliffs and partisan brinksmanship.
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