The penny, the smallest denomination of United States currency, has been in circulation since 1793. Over two centuries later, there is an ongoing debate surrounding its usefulness and cost-effectiveness. On one hand, some argue that getting rid of the penny would be beneficial both economically and logistically; on another hand, others contend that it should remain as a part of American culture. This article will examine the arguments for each side with respect to keeping or eliminating the penny.
First, this article will discuss eight reasons why people may support keeping the penny in circulation. Second, this article will delve into eight reasons why people might advocate for removing the penny from circulation. Finally, this article will consider other aspects of this issue related to our economic system and cultural heritage before coming to a conclusion about whether we should get rid of the penny or keep it in use. The evidence presented here will demonstrate why either side could make a valid argument as to which route society should take concerning our nation’s lowest denomination coinage.
Definition Of The Penny
The penny, or one-cent coin, is a unit of currency that has been used in the United States since 1793. It is composed primarily of copper and zinc with a diameter of 0.75 inches (19 mm) and thickness of 1.55mm. The obverse side features an image of President Abraham Lincoln, while the reverse side displays a representation of the Union Shield. In recent years there have been calls to eliminate this smallest denomination from circulation due to its low purchasing power as well as production costs exceeding face value.
Proponents for eliminating the penny argue that it causes more problems than good because it is too small to be useful in many instances and can lead to higher prices when rounded up at certain stores. Additionally, they state that coins take up valuable resources such as precious metals which could be put toward other uses if eliminated.
On the other hand, opponents point out that it still serves an important function and provide convenience for customers who are not able to use larger denominations due to their limited budget or lack of access to banking services. They also claim that keeping it would help preserve America’s history by celebrating the country’s first president on every coin minted.
History Of The Penny
The penny has been in circulation since the United States’ inception and is a symbol of our nation’s early history. The first one-cent coin was issued in 1793, which featured Lady Liberty on its obverse side. This design remained until 1856 when it changed to an Indian Head motif that lasted for over 50 years before changing again in 1909.
Since then, the reverse side of the penny has featured four different designs: a wheat ear emblem (1909–1958), a Lincoln Memorial (1959–2008), Union Shield (2009–2019) and most recently, the Sower representing prosperity (2020–present). During this time period, various types of metals have also been used to mint pennies such as copper, bronze, zinc, steel and tin.
In addition to its physical evolution through the ages, there are many cultural aspects associated with the penny as well. Some people keep them as keepsakes or collectible items while others use them for luck charms or superstitions about wealth and abundance.
Here are some examples:
- throwing coins into fountains or wishing wells.
- placing coins inside wallets or purses.
- carrying pocket change for good fortune.
- using “lucky pennies” to bring success.
- keeping cents under mattresses for financial stability.
Though opinions may differ regarding whether we should get rid of the penny or not, it is clear that it holds significant value both economically and culturally. Its place within our society cannot easily be dismissed due to how deeply engrained it has become over centuries of usage.
Cost To Produce And Maintain
The cost of producing and maintaining the penny is a major factor in making an argument for its elimination. Minting one cent coins costs more than their face value with production costs as high as 1.7 cents per coin. Further, it has been estimated that eliminating pennies would save $150 million each year by reducing minting, distribution, and storage expenses associated with them.
On the other hand, some argue that these savings are not significant when compared to the overall budget of the U.S. Treasury Department or even the Federal Reserve System’s operating expenses since those amounts are far larger than the costs associated with pennies. In addition, many point out that banks already incur certain costs related to handling coins regardless of denomination; hence replacing all small-denomination coins would only replace one set of operational challenges and problems with another.
This could result in higher transaction fees due to increased labor costs and processing time needed for sorting and counting coins if they were replaced with nickel denominations instead of paper currency or electronic payments.
Impact On Purchases
The impact of eliminating the penny on purchases is an important factor to consider. On one hand, it could lead to faster transactions and smoother checkout lines since customers would not need to count out pennies; however, on the other hand, some people might feel as if prices are going up due to rounding totals up or down at checkout.
|Faster transactions/checkout lines||Prices may seem higher due to rounding total costs up/down|
|Fewer coins in circulation||Some items that cost exactly a certain amount (eg. $1) will no longer be available for exact price|
|No need to carry around extra change|
Rounding prices has been studied extensively by economists and their findings have been consistent—rounding does not cause net inflation despite possible temporary effects. Additionally, this effect can be offset through consumer education about how much they are actually paying for products after rounding. Ultimately, though there may be minor changes in individual purchase experiences with the elimination of pennies, these differences should not affect consumer spending patterns significantly in either direction.
Benefits Of Keeping It
The penny has been a part of American currency for over two hundred years, and it serves several purposes. Its primary use is as an aid in making exact change; this helps to prevent businesses from receiving more money than they are due or customers from being shortchanged. The U.S. Treasury Department also cites the penny’s role in helping people learn about our nation’s history, recognizing important figures such as Abraham Lincoln on its face. Additionally, the penny promotes charitable giving as many organizations have taken advantage of the opportunity to distribute coins with messages or designs related to their causes.
Finally, economic research indicates that eliminating the penny would lead to higher prices throughout the economy because rounding up would disproportionately hurt low-income households who do not benefit from fractional pricing discounts like wealthier individuals do. This could increase inequality among different income groups and be regressive overall when taking into account all of these effects together.
Consequences Of Eliminating It
Removing the penny from circulation could have significant consequences. First, it would mean that prices ending in $0.99 will be rounded up to the nearest nickel which has been estimated to cost consumers an extra $600 million annually. Second, while eliminating pennies may reduce production costs of coins by Mints, the savings are relatively small compared to the potential losses faced by businesses and individuals due to inflationary impact resulting from rounding off prices upwards for goods and services.
The overall net effect is likely to result in a loss of consumer confidence in monetary transactions as well as an increase in economic inequality between those who are able to benefit from higher prices and those unable to do so. As such, keeping the penny appears more advantageous than removing it from circulation.
The penny has been a controversial topic in the United States for many years. This article explored both sides of this debate, providing reasons to keep or eliminate it. The history and cost associated with producing and maintaining the penny were discussed as well as its impact on purchases. Additionally, benefits of keeping it and consequences of eliminating it were covered.
As mentioned in the article, one benefit of keeping the penny is that it allows people to purchase items more precisely than if they used higher denominations only. Another argument focuses on sentimentality; some individuals have strong emotional ties to their pennies which would be lost if they were no longer available. Lastly, there are those who argue that getting rid of the penny could result in price increases due to rounding up prices.
On the other hand, supporters of eliminating the penny point out that minting and distributing these coins costs millions each year—money which could be put towards other causes such as reducing debt or funding programs for veterans or education. Furthermore, proponents suggest that most transactions today use credit cards and digital payments so physical currency is not necessary for small amounts like a penny anyways.
Ultimately, whether we should keep or get rid of the penny is still an unresolved issue but can depend heavily upon personal opinions and values held by citizens across America.