Posted 04 March 2013 - 11:11 PM
"The Future of the Penny"
I know many of us are trying the best we can to get by in life and are concerned about our
economy's current state. I mean, it's almost hard not to think about. But I feel that why there is certainly
plenty thought put into it there is not enough done. No matter how optimistic people seem to be about
the future, things haven't seemed to get any better. I believe simple changes can be done in our
everyday lives to slowly improve our economy little by little. One of these simple changes that can be
easily done is the removal of the penny from our modern currency system.
As you may already know, the cost of producing a penny is more than a cent. It currently costs
about two and a half cents to make a penny. The price of the metals used to make pennies, Copper
(2.5%), and Zinc (97.5%), have fluctuated the few past years. A few alternative notions have been put in
place, such as waiting for the prices of these metals to decline once again or making them with a
cheaper substance such as steel. The latter was done during the 2nd world war to conserve resources.
And while I think both of these notions are feasible I believe it would be better for our country on the
whole if the one cent piece was eliminated still. I doubt the former since the price of producing pennies
has only risen the past several years. Because while making them out of steel would save money, it
would be the matter pennies contain these slightly more-valuable-than-worth metals that they still have
So what would happen to the pennies after all their value was phased out? Well this could
potentially spark up a new industry to melt down pennies and harvest the copper and zinc they contain.
A practice done largely in secrecy all ready as it is highly illegal to destroy government reserve. In
addition, the government has heavily restricted the exportation of coins. However, I believe after the
penny is discontinued the government will no longer put forth laws protecting it. From 1793 to 1857
there was a half cent piece, which once eliminated was no longer protected. Today, its value does not
come from what it was made from (a surprising 100% copper), but from its rarity. Re-sale prices for
these old half cent pieces ranges from around roughly 30 dollars for later minted coins to prices in the
thousands for the earliest and uncirculated coins.
A handful of counter arguments have been made in support of the penny. I have provided a
portion of these arguments here and have written responses.
• Prices will be rounded up, not down - This would mean that instead of saving four cents for each of the
millions of products and services currently listed with a price ending in .99 that each consumer would
have to pay a cent more. This, I believe, is not the case. In other countries where their own one cent
piece has been eliminated, prices have not rounded up. The current reason prices are always kept at a
.99 tail cost is for the psychological reason that it is an aesthetically pleasing price. With the removal of
the penny companies the nation over will alter their prices to a .95 tail cost instead.
• Nickels will need to be produced more, which currently cost more than five cents to make - This
argument is fairly valid. It currently costs about 11 cents to produce a nickel, which is a slightly less ratio
than the fraction of money spent on and for producing a penny. This is also why I wouldn't mind having
nickels made with steel for a short time. Paper money doesn't inherently have any worth to it substance
- wise right now, so why can't we do something similar with nickels before possibly eventually phasing
them out as well?
• Charities need pennies - Many times throughout the country you might have found yourself buying
something and dropping your spare change in a small plastic bucket by the side of the checkout counter.
Odds are that the majority of the change you dropped in these containers were pennies. In fact, I
believe that this may solely be what many people use pennies for anymore. While I certainly understand
that people may not want to part with their nickels, dimes, quarters, or (in the unlikely event) cash, as
easily as it is, I think after the penny has been invalidated, nickels shall take up their place as the lowest
common denominator of value and will be equally as spared.
• Abraham Lincoln should continue to be honored - I found this to be a more silly argument for the
penny. With the Lincoln memorials, appearances on stamps, namings of towns, cities and buildings after
him; and finally his presence on the Five dollar bill which certainly isn't going anywhere, I think this one
change will not be disrespectful in itself to one of our most celebrated presidents.
At first, discarding the penny may not sound like a very desirable concept, but after just a bit of
thought is put into it, I think it's understandable that this is one move worth making. Recently, during a
conference president Obama was asked about his stance on the penny disposal notion. To which he
replied, "I don't know". This kind of discussion doesn't quite assure me that our country is ready to start
taking even the small steps toward a better economy, even if the plans are all ready made to.
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