Is America's Pride Keeping the Penny Alive?
We know that the penny is more trouble than it's worth. One professor at MIT believes the biggest thing keeping it alive is a reluctance to acknowledge inflation.
Most of us are aware that pennies are pretty useless in today's America. They don't often circulate. They cost more to make than they're worth. They are so unwanted that convenience stores set up tiny trays so you can just kick them down the road to help the one guy who finds himself three cents short on his midnight run for Mountain Dew and Red Vines.
Aside from that one guy and maybe the homeless, pennies exist for little more than storage in old coffee tins. Save your pennies, they say. One day, when their buying power is even less than what it is now, you'll be able to turn them into (not much) cash.
In 2013, the Royal Canadian Mint effectively killed its penny. So why hasn't America taken after its northern cousin and done the same?
President Obama thinks it has something to do with nostalgia. After all, pennies are from heaven, or so say our grandmothers, and many folks have fond memories of stashing them within their ill-fated piggy banks. Others believe that phasing out the one cent piece would be an insult to the legacy of Abraham Lincoln, whose face graces the obverse side of the coin. The counterargument asks whether it's really an honor to have your mug engraved on useless currency.
Other arguments for saving the penny exist but they're mostly peddled by the zinc lobby, who cites the financial harm price-rounding could do to the economy (not to mention the financial harm no more pennies would do to the zinc lobby). Remember, pennies have been composed of 99% zinc since the early 1980s.
Adam Chandler of The Wire has an interesting piece on pennies that's currently being featured on Business Insider. He asked MIT professor Dr. Jeff Gore, who actively seeks to retire the penny, about America's favorite Abrahamic piece of not-copper:
"Retiring the penny is a very explicit acknowledgement of the fact that there has been inflation over the years. And it's not that it's been hyperinflation necessarily, but three percent each year for many years. For many people this is painful to acknowledge, this idea that our currency is being less valuable."
So is it pride that's causing us to pay 1.6 cents for every one cent we mint? It's an interesting theory. I suppose it's up to you, the observer, to decide whether it holds more water than Obama's appeal to nostalgia or the zinc lobby's appeal to their own wallets.
Either way, it doesn't look like we'll be seeing the end of the penny any time soon. What's your opinion on the matter? Go ahead and "take a comment, leave a comment" down below.
Photo credit: Natali Glado / Shutterstock
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