Canada Killing Off The Penny – Should The U.S. Do The Same?

CDN Penny

Once again our friends to north are making a logical and rational decision; they are killing off the penny.  The decision was made due to the rising cost of metals and the fact that the coin has very little use in today’s world.  The Associated Press reported that on Monday, The Royal Canadian Mint officially ended its distribution of one-cent coins to financial institutions. While people may still use pennies, the government is urging store owners to start rounding prices up to the nearest nickel for cash transactions.  Electronic purchases will still be billed to the nearest cent. The coins will remain legal tender until they disappear from circulation.  Other countries that have dropped the penny include Australia, New Zealand, Norway, Finland and Sweden.  In this country, the penny costs more to make that its actual worth; approximately two cents. It’s a losing proposition. So while it seems like a good idea for the US, the idea has opposition and is a little more complicated.  First, in order for the penny to be dropped in the US, it would require Congressional authorization.  It would have to be legislated and signed by the President; never an easy task.  Second, the zinc lobby is absolutely against the idea because it would be a blow from which the industry couldn’t recover. Third, it’s argued it would lead to inflation.  Fourth, it would actually be a hardship on poorer Americans even though it doesn’t sound like much money.  Fifth, it would hurt charitable organizations.  Many Americans apparently save their pennies and donate them to charities which raise millions of dollars in this fashion.  Perhaps there is some merit to these arguments, but the fact remains, the penny has outlived its usefulness as a currency.  Long gone are the days when people wore pennies in their loafers and visited the Penny Arcade.  The Canadians have now done it and we should as well.

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