Need a penny? Sorry, I’m fresh out…

It looks like legislation has entered Congress to do away with the beloved penny. It seems someone tried to do this in the past, 2001 to be exact, and failed. Here are a couple of links:

http://www.bangornews.com/news/templates/?a=136546http://money.cnn.com/2006/07/18/news/penny/index.htm?cnn=yes

Ok, so Rep Jim Kolbe of Arizona has introduced this bill that will effectively kill the penny. Now, I don’t rightly care about the penny itself… because I don’t like carrying them in my pockets when I do happen to use cash for a purchase. However, what I do mind it the whole idea of “rounding” all purchases, which is the main purpose of this bill, the Currency Overhaul for an Industrious Nation Act. The COIN Act… clever, eh?

So, by definition of this bill, all items with a price ending with 1 or 2 cents will be rounded down to 0. Those ending with 3 or 4 cents will be rounded up to 5 cents. Those ending with 6 or 7 cents will be rounded down to 5 cents. And, finally, those ending with 8 or 9 cents will be rounded up to 0 cents. Let’s list some pros and cons of this…

Pros:

• Those cost of making pennies is actually more than the coin is worth. Zinc prices have increased, and since zinc is themain ingredient, it stands to reason that the cost of the coin would increase. So each coin costs 1.4 cents to make whereas its value remain 1 cent. So this would save America money.
• It will reduce the amount of loose change in America, over time. Less clutter is a good thing.
• It makes currency transactions easier for our ever-dumber society.

Cons:

• It leaves the nickel as the lowest donimination. It’s my belief that this will drive costs upwards, meaning that the American public will be charged extra cents for each purchase. Why can I say that? Review the rounding rules above… how many products have you seen in the American marketplace that end with 1, 2, 6, or 7 cents? Exactly how often do you think retailers will round down? Hell, Wal-Mart prices most things at $x.88 or $x.98. I haven’t reviewed Wal-Mart’s prices in quite a while, so I could be mistaken there. Regardless, say the American public purchase 10,000 items at $0.98. Under the new legislation, the items would be rounded up to $1.00. That’s an extra $200 to the retailer, because there is no smaller denomination. With the elimination of the pennies, the USA saved $280. I’m not sure where the unaccounted $80 will end up… which is why this doens’t make sense to me. Feel free to explain it to me, I’d love a good answer.
• Rep. Kolbe is from Arizona. Arizona produces the majority of the copper the America uses. Guess what the main ingredient of a nickel is… yup. Copper. I have nothing against Arizona, but this seems like a shameless push to get more federal money into the state’s coffers. So, if Arizona cuts me in on the deal, I’ll drop this qualm.

Anyway, just thought I would bring this to your attention. Keep an eye out for this. Perhaps we should all contact our representatives to stop this bill from passing. I, for one, would like to keep the penny around.

For those who hate the penny, I’ll gladly accept your pennies. Just email me and I’ll tell you where to send them. I need something to fill my “penny jar”.