![]() ![]() Back in 1857, we killed the half-cent coin - which, when adjusted for inflation, was as valuable then as about 14 cents is today. history, we never had a coin as worthless as the penny is now. In the end, it would basically be a wash.įor most of U.S. Sometimes you'd round up other times you'd round down. "And so if you round it to the nearest nickel, the customer wouldn't get gouged," Whaples says. All those $9.99 products? The prices would be jacked up to an even $10! They called it the "rounding tax." But Whaples, that penny-researching economist at Wake Forest University, conducted a study of convenience stores and found that the final digit of purchases, which usually involve multiple products and a sales tax, was pretty much random. Penny defenders' strongest argument was that eliminating it would hurt consumers. So were special interests such as zinc miners and the company that supplies the "penny blanks" used to mint the penny. Lincoln, of course, is on the penny, and Kolbe says that proved to be a major roadblock. But he kept facing resistance - for example, from the speaker of the House at the time, Dennis Hastert, who represented a district in Illinois, the home state of Abraham Lincoln. ![]() government a lot of money," he says.īy the 1990s, Kolbe says, he was introducing new legislation to kill the penny with every new session of Congress. "It was a logical reform that would have saved the U.S. (The penny is made mostly of zinc, not copper.)īut over time, Kolbe says, his proposal to kill the penny became more than just a way to help the copper industry. He saw polling that showed there was widespread support for killing the penny, so he and his colleagues bundled the idea of a new copper-coin dollar with the idea of killing the penny. He says, frankly, that he first wanted to help the copper industry in Arizona by getting rid of the paper dollar and replacing it with a copper-coin dollar. Initially, it was not a noble-minded quest to free us of the penny. He's a former Republican congressman from Arizona, and he began his fight in the late 1980s. Jim Kolbe spent two decades trying to kill the penny. The congressman who tried to kill the penny Money is supposed to be the medium of exchange, not dead weight. It takes most of us more than two seconds to fumble around with change or pick a penny off the ground, which explains why there are so many pennies on the ground. Wake Forest University economist Robert Whaples has calculated that the typical American worker earns a penny every two seconds. government about 2 cents to produce every penny. That's a lot of manpower that could be used toward making coins we actually need. The coin shortage could be a rallying cry for a long-running movement that has lost steam in recent years: Kill the penny! Last year, almost 60% of the coins that the U.S. Coins sit idle in closed stores' cash registers and people's homes, and they're not making it to the banks and companies that need them for business. kind of stopped," explained Federal Reserve Chair Jerome Powell last month. "With the closure of the economy, the flow of coins through the economy has. Mint cut back on coin production this spring to keep its workers safe. ![]() The specter of the coin shortage lurks everywhere.īlame COVID-19. Grocery stores are rounding their prices to even dollars or rejecting cash altogether. Arcades and gumball machine operators are bracing for the worst. ![]()
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