Producing a penny costs about 1.7 cents, and the Treasury’s annual penny deficit is about $50 million, according to a New Yorker article by David Owen.
Yet folks — and some companies — still want the penny around, in part because they fear merchants rounding up prices and increased reliance on the even more expensive nickel (which costs almost ten cents to manufacture).
But rounded prices would be virtually imperceptible to today’s customer, Owen argues — especially with a growing number of transactions being handled by non-cash media like PayPal or credit cards, which aren’t subject to rounding.
Owen makes a bold suggestion:
Get rid of nickels as well. (And don’t bother re-basing the penny.)
New Zealand successfully and peacefully axed its five-, one-, and two-cent coins. Canada stopped printing its one- and two-dollar notes (sans mass-protest) and — pointing to New Zealand’s success and minimal inflationary effect — is considering eliminating its one-cent coin.
If not success stories, and 60 Minutes segments, what will persuade Americans to drop the penny?
and 
. You can also watch it on 
We can all do our part to expedite this process by tossing our pennies in the trash bin.
Why isn’t there a 15 cent piece?
sure, canada got rid of 1 and 2 dollar notes… by replacing them with dollar and two-dollar coins.
not a good example to use when you want to talk about eliminating denomitions of currect.
Why do people care so much about a measly 50 million “loss”. That’s PEANUTS compared to everything else the government wasts money on and unlike Bridges to Nowhere the penny provides a service to the entire population.
Once again nobody ever takes into account the seigniorage windfall that the government reaps from the collectors and others who save pennies and nickels instead of passing them on. The amount of money made by the state quarters programme has been calculated at 11 billion dollars. Assuming the collection/storage rates (yes pennies are less diverse, but at the same time more collectable due to lower value) are the same then the government would have earned about 440 million pennies over the 10 years, or about 44 million per year. This reduces the 50 million $ cost to an even more insignificant 6 million.
Finally, the existence of the penny and nickel represent a point of national pride that our currency traditional maintains such a high value that such coins can be justified. Perhaps a better solution would be to try to reverse the trade deficit instead of just settling for a second rate status.
My $.02 is….
well, never mind.
Is this a problem we can solve on your own without changing government policy?
If you don’t like pennies, you don’t really have to use them. When a cashier offers you pennies as part of your change, just give them back or put them in the “give a penny, take a penny” bowl, or the charity bin some retailers have. When you pay, just use other coins or cards.
Likewise, retailers have the option of rounding all purchases down to the nearest 5 cents if they want to. Perhaps the cash-register can even be reprogrammed to do this automatically. I’ll bet the behavioral economics of this would make it a winning promotion, even if all the posted prices were raised just slightly to make it a zero sum policy on average.
Meanwhile, if other people and retailers get utility out of using pennies, let them.
I agree that it’s a waste of the government’s money (perhaps $900 million/year) to continue to mint pennies, but it’s small change compared to say, current and future spending on Iraq.
I spent five months in Australia and the issue of prices being round up (or down, they followed the basic mathematic rules of rounding) was only an issue when paying in cash. Coming back to the penny in the US was one of the most annoying things about returning home. I miss the colored cash, too.
Nothing will persuade the public! The government needs to show some leadership and deal with it as they would any other public policy issue.
The paper dollar needs to go too. We already have the dollar coin. BTW: coins are much cheaper to produce and last far longer than paper, thus the logic of that argument.
The argument that other things need attention is vacuous. Our gummit can’t do more than one thing at once?
I throw my pennies on the ground.
All it takes is an executive order, and effective 08/09/10: the penny and nickel are worthless, and the paper dollar comes out of circulation.