A penny bought a loaf of bread in early America, but it's a loafer of a coin in an age of inflation and affluence, slowly sliding into monetary obsolescence.

For the first time, the U.S. Mint has said pennies are costing more than 1 cent to make this year, thanks to higher metal prices. "The penny is going to disappear soon unless something changes in the economics of commodities," says Robert Hoge, an expert on North American coins at The American Numismatic Society.

That very idea of spending 1.2 cents to put 1 cent into play strikes many people as "faintly ridiculous," says Jeff Gore, of Elkton, Md., founder of a little group called Citizens for Retiring the Penny.

I despise pennies and would be overjoyed if they were phased out of the US monetary system. Stop making new ones, never give old ones out in change and melt them all down into playground equipment. (Even though playground equipment these days is made entirely from plastic.) Items could still cost any amount of money, you'd just round up or down to the nearest $.05 at the cash register, and no more would those annoying copper disks clog up coin trays and cash registers.

...The only argument I've ever seen against removing pennies, other than ones from tradition or sentimentality, is that consumers would get gouged on prices as stores increased everything a few cents... it's not true. Stores would actually lower prices, since they like the psychological illusion of prices being lower than a dollar. Things would cost $.95 instead of $.99, and anyway, stores could still set prices to penny values; the total would just be rounded up or down at the register. Besides, with multiple items purchased at once and sales tax on top of that, you never pay 99 cents for something that cost 99 cents anyway.

We'd just need the penny-deletion law to mandate that cash register prices had to round up or down fairly. That way we'd break even on purchases over time, with some costing you 1 or 2 cents more, and others costing 1 or 2 cents less. Bills of 98, 99, 100, 101, and 102 cents would all be an even dollar, and 7 could round up and 3 down, or vice versa, to keep it even over all.

Labels: money