Should We Get Rid of the Penny?

During yesterday’s “fireside chat,” aka Google hangout, with President Obama, he agreed with a man who wondered if it was time the United States retired the penny. Countries including Canada, Britain, Australia, and Norway have gotten rid of their lowest denomination coins, and it’s been a debate for a while in the U.S., but should we do it?

President Obama noted that it wouldn’t be a huge savings to discontinue penny production, but said that having the government spending money on something that isn’t used much seems unnecessary, calling it a “good metaphor” for some larger government waste problems. The cost of making a penny is about 2 cents.

Those who want to keep the penny worry that it would create a rounding process that would end up costing consumers more. It also could increase demand for the nickel, which wouldn’t end up saving the government anything — the cost of producing a nickel is about 10.09 cents. That’s in some part because of metal pricing: a penny consists of 97.5% zinc and 2.5% copper, and a nickel is 75% copper and 25% nickel. The price of copper jumped dramatically in 2007, as did the cost of making a nickel.

And let’s not underestimate the loss of penny-crushing souvenir machines.

So, should we say sayonara to the penny? Are we just sentimental about them, like the President suggested? Do you even use them anymore, or do they just pile up in a container on your nightstand?

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