Posts Tagged ‘penny’

Time to retire the penny

April 4, 2008

This morning I read a blog entry from Tim McAlpine of Currency Marketing explaining that there is a proposal to eliminate the Canadian penny on its centennial. This reminded me that my first experience with a penniless currency was the year that I lived in the Netherlands. I don’t know what the current conversion rate is with U.S. dollars, but at the time, their guilder was worth about 40¢. This meant their penny would have been worth much less than a U.S. penny, and in fact, they had eliminated it from their currency. In cash transactions, everything was rounded to the nearest nickel, which was worth about as much as a U.S. penny.

About the only thing that U.S. pennies are good for are for reconciliation purposes in check and debit transactions, and we can keep their theoretical existence there, but eliminate their physical manifestation. This would save the U.S. govenment a large amount of money in continuing to mint these nearly worthless coins. It now costs a little more than a penny to mint a penny. I’m sure the only reason we’re hanging on to this appendix is fear of inflation. I don’t think the Dutch economy experienced any inflation when they abandoned their penny, so I think it’s time we abandon ours. Just think of how excited all the numistmatists will be! That will make their penny collections much more valuable. What do you think?