O what a terrible nuissance, nay, an oppressor, is the penny, or so that widespread rag USA Today would have its readers believe. Legislation has been introduced that would eliminate the use of the one cent coin on grounds that, for the first time in history, it costs more than a penny to produce one. USA Today, in its lopsided coverage of the story, gives plenty of whiny reasons to support the coin’s termination, and offers a few halfhearted, sentimental appeals from collectors to save it from extinction. The economic consequences of such a drastic measure, however, are not discussed. Is USA Today ignorant of the bigger picture (a plausible assumption), or is it serving as a propaganda engine for certain interests?
Consider sales tax. Without the penny, all sales taxes must come in 5% increments. Gone are the 4% or 6% or 7.8% sales tax. Everything will be rounded, including every increase whenever the state needs to raise money. For some communities, this will include city sales tax. Rather than .5% or 1%, a city sales tax, for those cities that depend on them, will be 5% minimum. This means the total sales tax for some cities will be 15% at the very least by necessity.
Consider the cost of postage. The cost of a first class stamp will have to increase by a nickel each time, after it is first increased to the next highest 5 cent increment to enable people to buy them. This may seem to be an irrelevant concern to jaded e-mail addicts, but many people find writing letters to be less time-consuming and more enjoyable than spending money and time filtering and disposing of spam. Many private citizens and businesses rely on the postal service to ship or receive merchandise, and if all their postage expenses increase in 5 cent increments, this could have a detrimental cumulative effect on the economy perhaps more damaging than the rising cost of fuel. Pennies add up, especially when they suddenly become nickels.
In a bizarre twist of logic, the article seems to give support for the elimination of the penny by describing the bad effects that occur when a coin value is greater than the cost of minting it. Quarters were hoarded by many in the 1960s, it states, because the alloy of which they were made contained silver, which was melted down and sold. The point the writer is attempting to make, I imagine, is that the cost of minting a particular coin must never be greater or less than the value of the coin itself. It must be quite a trick for the government to guarantee that it costs exactly 25 cents to produce a quarter, 10 cents to produce a dime, and 5 cents to produce each and every nickel. O that wicked, treacherous penny! I am sure there must be some leeway in the production of the other coin denominations. Surely it costs considerably less than 25 cents to make a quarter, so why can’t it take the slack of the penny? It isn’t as if the entire world doesn’t know that our system of currency is based on nothing but faith. If legislators are so concerned about the cost of minting relative to coin value, they should return us to a system in which all currency is backed by gold and all coins are worth exactly the content of their metals. Playing both sides just isn’t cricket (or baseball, for that matter).
The arguments in favor of assassinating the penny consist primarily of complaints that pennies are worthless, annoying, and take up too much space in one’s pocket. Some people put them in jars and others throw them away. Saving money, by the way, was not considered a fault by the generation that survived the Great Depression and fought for our freedom in World War II. The current administration, though, has odd (read: addled) notions about fiscal responsibility as evidenced by its pleas for people to spend money as fast as possible for the good of the economy. Were they never taught about the Stockmarket Crash of 1929? I know the teaching of American history has been in decline in recent years, but shouldn’t our leaders know a bit of the story of our nation and those who built it in order to, well, learn from the mistakes of our past and make wise, informed decisions? I know it sounds silly, but I can’t help being a crazy idealist.
Pennies, I think I have shown, are far from worthless. Saving money, if one is not miserly, is a virtue. As far as taking up too much space, paying in exact change usually suffices to lighten one’s burden, and many charities benefit from small contributions by generous people across the country. Banks and automatic coin changers are also useful for transferring pennies into dollars. And as for the accusation of being annoying, I take issue with petty complaints against a noble coin bearing the likeness of Abraham Lincoln, one of our greatest presidents. The penny is a humble coin ennobled with the image of one of our greatest leaders, born of humble beginnings. Like Lincoln himself the penny is, in its way, apt, poetic, and crucial to the well-being of the United States.
