Monday, September 1, 2003

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A labor-saving suggestion on Labor Day

On a day of leisure, Jay Drezner suggests a policy step that would save everyone a lot of time:

I hate pennies (and hate is a strong word - my mother always told me that).

Pennies are a completely useless coin, not able to be used in vending machines, toll roads and perhaps not least importantly, Las Vegas coin counters. Not only that, but think about this - according to CNN / Money magazine, a penny costs around 0.89 of a cent to make. While they argue that the US Mint then ends up making money on the penny, I don't quite buy it.

Read the whole post. Lots of arcane links, too.

posted by Dan on 09.01.03 at 02:00 PM


AAFES (US Army & AF stores) doesn't even use pennies overseas.. they accept them, but change given is rounded.

posted by: spoon on 09.01.03 at 02:00 PM [permalink]

I like pennies because my kid likes pennies. He uses them to practice counting and arithmetic. Every other day or so we put the change we've collected into his piggy bank (which really isn't a pig). We talk to him about saving money and investing. He gets excited when we take it to the bank. For that reason, I like pennies.

Remember, a penny saved is a penny earned (minus opportunity costs for picking it up, transportation costs, and the 0.89 cent per penny adjusted for per capita cost of production based upon your highest marginal tax rate).

posted by: John Lemon on 09.01.03 at 02:00 PM [permalink]

There was a whole thing about this on the West Wing a couple of years ago. The best reason given for keeping the penny there was that Lincoln was on the penny and some Congressman from the Land of Lincoln would never allow the penny to be abolished.

But it should be. Living in Australia and then England has shown me that when coins are worth something you pay attention. The "no penny" system in Oz is great. You still end up with a pile of 5 cent pieces, but they are pretty easy to get rid of.

The other thing that bugs me is the dollar bill. It just takes up space in your wallet. Hopefully we could get rid of the penny and have a real dollar coin. I know the video game industry would be all for that.

posted by: Rich on 09.01.03 at 02:00 PM [permalink]

So a $1 bill just takes up space in your wallet but a dollar coin wouldn't?

posted by: Javier on 09.01.03 at 02:00 PM [permalink]

Rich, I'll gladly take those space hungry dollar bills off your hands.

posted by: John Cheeseman on 09.01.03 at 02:00 PM [permalink]

As long as there are strippers, there will be $1 bills.

posted by: Jeremy on 09.01.03 at 02:00 PM [permalink]

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