Pennies could be on the way out of our monetary system. While it might be difficult to imagine life without them, choosing to eliminate the production of pennies is clearly a wise decision that every person in our country should get behind.
On March 29, Republican Sen. John McCain of Arizona and Senate Budget Committee Chairman Mike Enzi reintroduced a bill that would halt the minting of the penny, according to a press release on McCain's website. The Currency Optimization, Innovation, and National Savings Act of 2017 (COINS Act) would not only stop penny production but would also introduce the use of a $1 coin and reduce the cost of nickel production.
"Change can be hard sometimes, but switching to a dollar coin could save our country $150 million a year," said Enzi, according to the press release.
In addition, the release claimed that the bill -- which has been both studied and supported by the Government Accountability Office -- has the potential to result in $16 billion in taxpayer savings.
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Given these figures, it is glaringly apparent that updating our monetary system by stopping penny production will positively benefit our country as a whole. These two numbers alone suggest that the bill should be taken seriously and passed as soon as possible. However, for those who still might be slightly skeptical, the are a myriad of other reasons why the penny should be eliminated.
According to Bankrate, both pennies and nickels are inefficient to produce. Some estimates show that pennies can cost over two cents to make, meaning that it costs more to make them than they are actually worth in practice. According to the site, the production of nickels and pennies results in a $436 million loss each year for the government. Stopping penny production (and making the production of nickels more efficient) would help to reduce this number.
Pennies are also bad for the environment. According to Money Crashers, pennies are 97 percent zinc. Zinc ores do not consist entirely of metallic zinc, and contain toxic materials like cadmium and lead. Such materials can contaminate areas surrounding zinc mines. In addition, penny production -- all the way from extracting the zinc from the ore to transporting the pennies to banks -- requires a large amount of energy.
One concern about stopping penny production is that -- according to Money Crashers -- it will result in prices being rounded to the nearest nickel, making things in general more expensive. However, many experts seem to believe that this will not be the case.
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“The fear is that if the penny goes away, everything that is $1.99 will go to $2,” said Chip Manning, director of the Babson Center for Global Commerce at Sewanee: The University of the South, according to Bankrate. “But in general, competition does a better job of keeping pricing in check, not the currency value of the coins.”
In addition, according to Bankrate, a study by economist Robert Whaples at Wake Forest University showed that people won't see any significant shift in price in either direction if the penny is eliminated.
With all of this in mind, it becomes clear that the existence of pennies is really not beneficial to anyone; in fact, their production is incredibly costly for our country. Therefore, we should all express our support for the COINS Act so that it can be implemented as soon as possible.