The Sarcasm Report v.155

March 30, 2012
Why the U.S. Penny Won't Die Like Canada's Just Did

There are objections to rounding, which one economist estimated could cost U.S. consumers as much as $1.5 billion over five years.

By all means, let's base our decisions on the opinions of *one* economist. That always works out awesome for us. Take Ben "There Is No Housing Bubble to Go Bust" Bernanke, lol.

And let's say it is true. One can only imagine the pain that was inflicted when the penny was once worth 20x what it is now. There must not have been any prosperity at all, due to all that rounding error.

Assuming it is true, then I wonder if there is something that could be done to compensate for this rounding effect. What if we were to tax corporations a tiny, tiny bit more and tax consumers a tiny, tiny bit less? No!! Taxing corporations more during a period of record corporate profits? That's just crazy talk!

Also, cutting out the penny may just put more reliance on the nickel—which is even more expensive to produce. In the U.S. loses 1.4¢ on each penny it makes and 6.2¢ on each nickel, according to Coin Update, an industry news source.

The U.S. loses $1.41 on each dollar's worth of pennies it makes. It loses $1.24 on each dollar's worth of nickels it makes. We must therefore keep the penny because nickels are just too darned expensive.

President Obama’s 2013 budget proposal includes plans to let the U.S. Mint change the composition of coins (page 173) so it can use less-expensive metals. It has changed materials before; pennies now are almost entirely made from zinc, not copper.

If only there was some way that we could replace what's in the nickel with what's in the penny and then reduce the size of the nickel to be the same size as the penny. I know it might sound hard to believe but there's a remote possibility that a dollar's worth of nickels would then be 80% cheaper to make than a dollar's worth of pennies. Could it work? Where's a rocket scientist when we need one!

It took a Canadian budget battle to kill that country’s 1¢ coin, but even in these economic times, don’t hold your breath for Congress to take down the penny soon.

This is what makes America great. We are masters of delaying the inevitable (can kicking). The penny has lost 95% of its purchasing power in the last century. Should this trend continue then we can expect it to lose 95% of its remaining purchasing power in the next century. So what does this mean? It would take about two thousand pennies to buy a candy bar. It gets even better. Those two thousand pennies could easily cost the equivalent of 50 candy bars to create. Prosperity? Here we come!

And lastly, if it was our intention to keep Abe Lincoln on the penny well into the distant future as an honor and symbol of our great nation, then perhaps we should have made sure the penny kept its value. Instead, we've debased his face.