Do Pennies Make Sense?

RETIRING THE PENNY COULD SAVE 1 BILLION A DECADE

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With America getting into a costcutting mode, Senator Joni Ernst (R-Iowa) published her top suggestions for cutting waste, and the abolition of the penny made her list. Under the heading “Bad Pennies,” she stated the measure would save about $100 million per year, as each one-cent coin costs three cents to make, and the government makes billions of them each year.

More than a decade ago, I wrote an article in a popular monthly magazine making the same point about tossing the cent, or penny, as it is commonly known. I also made this the subject of my talk at the American Numismatic Association’s World’s Fair of Money in Chicago at that time. I reminded readers and listeners that we were long overdue in following the lead of many other countries that successfully eliminated their lowest-denomination paper money and coins. I reminded them that Canada stopped minting pennies in 2012 and said that we need to do this, too. As an aside, Finland, the Netherlands, Sweden, Australia and New Zealand have also eliminated the penny.

UNITED STATES RETIRES OBSOLETE COINS

America has a long history of cutting its lower-denomination coins. We used to have half-cent, two-cent, three-cent and twentycent coins. If you have those coins, they likely have numismatic or collector value. The penny made sense when it was first struck in 1793, but not now, 232 years later.