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  • The story of the penny starts in the first US Mint founded in 1792 which produced these

  • one-cent pieces along with other coins including the Quarter, Dime, Half Dime and a mystery

  • coin that we'll get back to later.

  • These pennies of the new republic were born of 100% pure copper.

  • But, two forces conspired to ensure this wouldn't remain the case for long. The value of copper

  • went up and, because of inflation, the buying power of the penny went down.

  • This caused The Mint to reduce the amount of copper in pennies, first from 100% to 95%,

  • and then to only 5% copper and 95% zinc.

  • Despite this debasement, in 2006 the value of the metal in older pennies rose over 1

  • cent and suddenly they were worth more dead than alive so people melted them to sell the

  • raw copper for profit.

  • In a rational, efficient world, the story of the penny would have ended here with the

  • Government realizing that they weren't worth Minting and happy that its citizens were removing

  • them from circulation.

  • But, instead the Government made melting U. S. coins illegal and continues to manufacture

  • 4 million pennies each year.

  • Which is idiotic as it costs the US Mint about 1.8 cents to make a each 1 cent penny.

  • But, even if pennies were minted from something more representative of their true value -- like

  • plastic or lint -- it wouldn't fix the fundamental problem that pennies are bad for people and

  • the economy.

  • Here's why:

  • The purpose of physical, cash money is to make it easy to transact the everyday business

  • of buying stuff.

  • A shopkeeper has stuff and you want that stuff. Rather than bartering like savages for it,

  • you use cash as a medium of exchange.

  • To get the price just right the cash must be divisible into pieces so that you don't

  • overpay.

  • But it isn't divided forever, because at some point the value it represents is too small

  • to buy anything or bother with. Which brings us back to the penny.

  • In the olden days, pennies could actually buy stuff, no more. Now, if you want to spend

  • pennies, you're going to have to put in some effort.

  • For example, try to pay for 20 bucks worth of groceries with 2,000 pennies weighing 11

  • pounds and see how that works out.

  • So you have to get rid of them by using exact change.

  • But, because the United States doesn't include sales tax in prices -- unlike more civilized

  • countries -- and you can't multiply by 8.875% in your head, you can't get your change ready

  • before you reach the register like a good Samaritan would.

  • The pennies you inevitably fiddle with after discovering the true cost of your goods add

  • two seconds to each cash transaction on average which is less than the value of your time,

  • and the time of everyone behind you, which is why most normal people don't bother messing

  • with change and the usual penny-counting culprits are those with nothing better to occupy their

  • day.

  • If you want to spend pennies without being an inconsiderate jerk who wastes other peoples'

  • time perhaps you can find a machine that will accept them.

  • Good luck with that. Vending machines won't take pennies, neither laundry machines or

  • toll booths or parking meters or anything else -- because pennies aren't worth the time

  • and effort to count, store and transport them.

  • In fact there is only one machine that takes pennies: Coinstar -- a leach on the economy

  • that eats 10% of your money while providing nothing in return except the ability to spend

  • cash that was already yours.

  • The difficulty of spending pennies is why they end up in jars, dead to the economy after

  • a short, useless life where they failed at their only job, to facilitate exchange and

  • instead did the exact opposite by being a literal dead weight on every cash transaction.

  • They must be eliminated.

  • But, you might think, won't prices rise and charities lose money without the penny?

  • No.

  • New Zealand got rid of their 1 cent coin, as did Oz. Finland and the Netherlands ditched

  • the 1 euro cent coin as well. Though that might have been because of how absurdly small

  • and frustrating 1 euro cent is.

  • These countries round to the nearest 5 cents for cash transactions and none of them saw

  • prices rise or charitable donations drop.

  • And anyway, the United States has already gone through this process before without trouble.

  • Remember the mystery coin from the beginning? That was the half-cent. Seen one lately? Of

  • course you haven't. It was discontinued in 1857 for being worth too little.

  • But when the half-cent met its fate, it had more buying power than today's dime so perhaps

  • the list of modern coins to kill could even be larger.

  • There is one last, irrational problem with getting rid of the penny.

  • Everybody loves Lincoln -- well almost everyone. After booting off Lady Liberty and the Chief,

  • the US sure has Lincoln-ified the penny within an inch of its life.

  • But ditching the penny won't erase him from history.

  • Lincoln, and his monument, are still on the 5 dollar bill which isn't going away.

  • And, even if you think it's unpatriotic or disrespectful to retire Presidential coinage,

  • allow me to direct you to a little organization known as the United States Military.

  • Where, in overseas bases, they've already abolished the penny by automatically rounding

  • to the nearest five cents.

  • Sooner or later even the most ardent Lincoln lovers will have to give up the penny: they

  • cost more to make than they're worth, they waste peoples' time, they don't work as money,

  • and because of inflation they're less valuable every year making all the other problems worse.

  • Sorry Abe, but it's time to kill the penny.

The story of the penny starts in the first US Mint founded in 1792 which produced these

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