Past its prime: Pitch the penny

Posted: April 8, 2012 - 11:20pm

OUR NEIGHBORS to the north have started doing something that the United States should consider: Phasing out the penny.

Canadian officials have just announced a budget that calls for the elimination of pennies.

Beginning this fall, Canada will halt distribution of its one-cent coins. It will allow those pennies in circulation to remain legal tender, until they gradually disappear, as old pennies generally do.

The Canadian government said its top goal is to save money, as pennies cost more to make than they’re worth.

That’s true in this country, too.

In fact, it costs the U.S. Mint slightly more than 2 cents to produce and distribute each penny. That’s the highest level ever. The costs include materials, which have skyrocketed in price in recent years.

Canadian officials also note that New Zealand, Australia, the Netherlands, Norway, Finland, Sweden and other nations have pulled the plugs on their lowest denomination coins. The transitions have been smooth.

Pro-penny advocates are likely to fight back if America follows their leads. They include mining companies and makers of coin-counting machines, who have vested interests in maintaining penny power.

Some have tried to frighten Americans, claiming that retailers would rip off consumers by rounding up their prices to the nearest nickel. That may be correct for current prices that end in nine (which seems to represent the majority of sales stickers on everything sold). Still, rounding up by a penny hardly equals rampant price-gouging.

Two years ago, Congress passed the Coin Modernization, Oversight and Continuity Act. It authorizes the Treasury Department to investigate whether less-expensive materials and techniques could be used to make and distribute the penny (it’s no longer mostly copper; it’s mainly zinc). A contractor has been hired to do this work, and the findings are expected in December.

But this effort itself seems like a waste. Instead of making cheaper pennies, get rid of them.

Pennies get no respect today. They clutter dresser tops and weigh down purses and pockets. If you collect them in jars and take them in for exchange in some places, you’re charged a fee to count them. You often find them lying on the ground because they’re not worth the effort to pick up.

Abraham Lincoln was one of America’s greatest presidents. Yet his face is on a metal circle that’s obsolete and considered almost worthless. That’s doing Honest Abe a disservice.

Canada has the right idea. Stop making and distributing pennies. Few will miss them when they’re gone, as few care about them when they’re here.

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