Canada kills the penny; should we follow?on January 29, 2013 @ 2:06 pm (Updated: 4:10 pm - 1/29/13 )
"Nobody wants a penny anymore. I spend so much of time now trying to get rid of pennies," Luke says.
Canadians certainly think so. The government decided to phase it out because it cost more to produce than it was worth, along with "the increased accumulation of pennies by Canadians in their households, environmental considerations, and the significant handling costs the penny imposes on retailers, financial institutions and the economy in general," said the Royal Canadian Mint in a statement.
Under the Canadian plan, cash payments or transactions will be rounded up or down to the nearest nickel. Checks (or cheques as the Canucks spell it) and plasticódebit, credit and payments cardsówon't need to be be rounded, because they can be settled electronically to the exact amount.
"I just think pennies are at this point, because of inflation, they're worthless," Luke says.
Luke's not alone. A group called "Retire The Penny" is pushing for the U.S. to get rid of the coin. It cites the U.S. Mint's 2011 annual report, which says the current cost of a penny is 2.4 cents per coin. And it says the U.S. spent almost $120 million to produce less than $50 million in pennies in 2001.
"If I have pennies in my pocket from a purchase and I'm walking down the street I'll put them on a garbage can or I'll put them on a utility box," Luke says.
Numerous efforts in Congress to kill the penny have come up short. "The penny has no functional use and is costing the country the country tens of millions a year to make," former Rep. Jim Kolbe (R-Ariz.) told Politico several years ago after failing over the years to pass legislation ending the coin. "Doing away with it doesn't raise taxes and it doesn't eliminate services. That's a good deal."
Even the West Wing has weighed in on the great penny debate. In the episode "War Crimes," Rob Lowe's character Sam Seaborn gets behind one lawmaker's effort to eliminate the coin.
Josh Lyman: Why?
Sam Seaborn: Why?
Josh Lyman: Yes.
Sam Seaborn: Because this country is populated with unbalanced people. Many of whom find their way to Washington. As if the continent funnels them into this one spot.
Josh Lyman: He wants to abolish the penny?
Sam Seaborn: He doesn't want to abolish it, as much as he wants to give his boss a reason why we can't.
Josh Lyman: Well, it's stupid.
Sam Seaborn: Yeah, but the thing is... it isn't really.
Josh Lyman: Really?
Sam Seaborn: It turns out the majority of pennies don't circulate. They go in jars and sock drawers. Two-thirds of the pennies produced in the last 30 years have dropped out of circulation.
Josh Lyman: You've been reading about this?
Sam Seaborn: It's interesting.
Josh Lyman: No, it's not.
Sam Seaborn: The Mint gets letters with pennies taped on notebook paper. Letters from citizens who found the pennies on the street and mailed them back to the Treasury to help pay down the debt.
Josh Lyman: It's almost hard to believe that plan hasn't worked.
Sam Seaborn: It's also bad for the environment. Production requires the mining of millions of tons of copper and zinc each year.
Josh Lyman: Zinc?
Sam Seaborn: In 1982, they changed the composition to 97.5% zinc and only 2.5% copper.
Josh Lyman: Sam?
Sam Seaborn: I'm turning into one of the funnel people.
So is Luke. But he does admit a certain superstition has him hoping pennies don't disappear entirely.
"See a penny pick it up and all the day you'll have good luck."