Realm of the Coin

February 18, 2013 by  
Filed under Blogs, Hot Button / Lynn Ashby

THE COUNTER – “That will be two dollars and 51 cents,” says the clerk. All I’ve got are dollar bills, and hand her three. So the clerk glumly digs out a quarter, two dimes and four pennies. Sometimes there is a penny box near the cash register, or the clerk will just shrug and forget the penny. But up north, they don’t have that problem. The Canuks are doing away with their penny, or as the Huffington Post put it, “Soon, Canada will be penniless.”
The last Canadian penny was minted in May, and none too soon. According to the Canadian Mint, ending that operation will save the tundra taxpayers an estimated $11 million each year. The reason being that the coin which is worth one cent actually costs 1.6 cents to make. (Incidentally, the end of the Canadian penny has caused a rush by coin collectors.) As the penny slowly makes its way out of circulation, which may take three to four years, Canadian businesses have been asked to round all cash transactions up and down to the nearest 5-cent increment. So the next time you are buying walrus blubber in the Yukon, remember that items costing $1.01 or $1.02 will simply be rounded down to an even $1.00, while goods that cost $1.03 or more will be rounded upwards to $1.05. But if you use your credit/debit cards or checks, the price won’t be rounded.
Will Americans ever follow their northern brethren in the realm of the coin? We have been debating the use and uselessness of the penny for years. If you are a conservative you like our currency the way it is — no change in the change. If pennies were good enough for Strom Thurmond, they’re good enough for us. But conservatives don’t like to waste government money and, just like the Canadians, a U.S. penny costs more to make than it’s worth.
The cost fluctuates due to the ever-changing price of metals, but in 2012 it cost the U.S. Mint two cents to make a cent, down from 2.41 cents the year before. That figure includes distribution, Mint overhead, etc. The total loss in producing the penny last year was $58 million, slightly less than in 2011 which had a loss of $60.2 million. To save tax dollars, conservatives should support dropping the penny. If you are a liberal, you want change you can believe in, even if it’s your children’s change. But the situation is not that simple. If a penny was coined – so to speak – and used once and thrown away, then, yes, the cost would be more than the value. But pennies, like diamonds, are forever, so we can’t accurately say we’re losing money in the operation, just that it costs more to make, count and distribute, than its face value.
If we start doing away with pennies, we’ve got quite a job. The U.S. Mint doesn’t know exactly how many are in circulation, but estimates about 140 BILLION. Some numismatists (I don’t get to write that word often) put the figure as high as 200 billion. Since the first penny was struck in 1787 until today, more than 300 billion pennies have been minted in the U.S. So if the Mint’s estimation is correct, we are missing 160 billion pennies. Check under your sofa pillows.
Then there’s the nickel, which is actually made of zinc, copper and nickel. As with the penny, the cost of producing a nickel changes with the metal market, but for fiscal 2012 to make and distribute the five-cent piece it cost 10.09 cents, down from11.18 cents in 2011. Like the penny, to make a nickel costs about double its face value. Maybe we should go back to beads, wampum and beaver pelts, because a look at our current currency shows we’ve stumbled a lot, often just to be politically correct. Remember the Sacagawea silver dollar? In a sop to NOW, Treasury Secretary Robert Rubin specifically told the committee designing the new silver dollar to come up with a minority woman. The dollar bombed.
Did you ever get a Suzy B. Anthony dollar? Not many people did. Back in 1979 the government came out with that coin. By 1981 it had struck 857 million of them, at which point the U.S. Treasury found it had 550 million metal Anthony coins lying around in sacks in Mint vaults. Nobody wanted the dollars. Not be sexist, for five years the Mint produced Presidential $1 coins (all featuring males, of course), totaling about $2.4 billion. But nobody wanted them either, and a large portion are now gathering dust in Federal Reserve vaults. Yes, we aren’t real good at choosing our currency. When was the last time you received a $2 bill or a 50-cent piece?
If we really want to save tax dollars of any kind, Congressional auditors say replacing dollar bills with dollar coins could save taxpayers some $4.4 billion over the next 30 years. A one-dollar coin could stay in circulation for 30 years while paper bills have to be replaced every four or five years on average. But our current silver dollar causes confusion because it looks very much like a quarter. Speaking of which, the feds decided that each state could put their own special logo on the reverse side of the 25-cent piece. Texas chose the Alamo, obviously. This brings up the question of what our state’s secessionists would want on Republic of Texas currency. Willie Nelson or Earl Campbell? How about the Old Dime Box dime? The El Paso peso? Let’s go back to Luckenbuck, Texas.
Soon we may be saying so long, pennies from heaven, penny wise and pound foolish. Goodbye a penny saved is a penny earned. Can J.C. Penney be far behind? Should we do away with the one-cent coin? A penny for your thoughts, which may be worth two cents. Can you round this off to the nearest beaver pelt?

Ashby is in circulation at ashby2@comcast.net

Speak Your Mind

Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!