Should the US dump the penny too?
Canada is phasing out the coin, saying it offers too little return. The US spent $120 million in 2011 to produce $50 million in pennies.
Canada is phasing out the penny, with the the Royal Canadian Mint on Monday halting distribution of pennies to banks and other financial institutions.
That means that the supply of Canadian pennies will gradually decline and eventually go the way of the dodo. But why is our northern neighbor taking the step, and should the U.S. follow in its footsteps?
Canada's reasoning is partly financially driven: Each penny costs the country 1.6 pennies to make. But Shelly Glover, Parliamentary secretary to the minister of finance, noted another couple of reasons in bidding farewell to the penny.
"They demand too much time, for too little return, of our small business owners," she said in a statement. Moreover, pennies "have sat idle for too long in forgotten penny jars and couch crevices."
That's something that most Americans can relate to. Who doesn't have a jar full of pennies sitting on a shelf? And who doesn't find their wallets bulging by the end of the month, since it seems too annoying and slow to count out cents when paying for items with cash?
Getting rid of U.S. pennies isn't an unknown idea. There's actually a group called the Citizens to Retire the U.S. Penny, which is advocating for the cent's demise within the 50 states. Their reasons are fairly similar to Canada's penny-wise logic.
"According to the U.S. Mint's 2011 annual report, the current cost of a penny is 2.4 cents per coin," the group's website notes. The group says that the U.S. spent almost $120 million in 2011 to produce $50 million worth of pennies. Of course, that's a drop in the bucket compared with the U.S. government's $3.5 trillion in annual spending.
So how will Canada lose its cents? Canada says consumers will still be able to redeem their pennies at banks or other financial institutions. The government also hints that Canadians may want to donate the coins to charities.
Even though the government will stop minting the coins, they'll still maintain their value, the country's department of finance said. But it'll be up to businesses whether they want to accept pennies, it added.
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I read somewhere, maybe a MSN article, that someone tried to pass a bill to get rid of the penny a while back, but the 'zinc lobby' prevented that from happening. The penny is made primarily of zinc. I'm starting to notice that whenever you hear about some change that should have happened a long time ago, usually the reason why it hasn't is due to some lobby's influence.
Seems like a lobby's needs is always more important than a country's needs or more important than progressing forward in a positive manner that should be expected from any sensible first world nation.
Knock Knock Knock
Knock Knock Knock
Knock Knock Knock
Pennys? Sure they cost money, but we use them.
How about all the money wasted on dollar coins that aren't even in circulation?
You know those advertisements and articles about the teen who starts saving and has a million dollars or more at retirement? Well that's my pennies. With my pennies I've had the money to put gas in the car when I ran over budget due to a family emergency. They have purchased medicine, diapers when my sister ran out for her baby and was out of cash.
Most of the time penny the bank just got full, pennies got rolled and delivered to the bank. I had a separate savings account for my pennies. It actually started when I was about 5. That savings account has been kept separate and moved with me from Toledo to Milwaukee to Las Vegas. The penny account pro bought a couple of residential lots that were sold at a nice profit.
Last year when I was injured and unable to work the proceeds from those lots and what was left in my penny account helped to pay the taxes on my home, and other expenses when I was without any other income. Since I'm self-employed I don't qualify for unemployment or workman's comp. I'm on my own. Pennies have truly helped to keep my family alive.
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[BRIEFING.COM] Equity indices closed out the month of August on a modestly higher note. The Russell 2000 (+0.6%) and Nasdaq Composite (+0.5%) finished ahead of the S&P 500 (+0.3%), which extended its August gain to 3.8%. Blue chips lagged with the Dow Jones Industrial Average (+0.1%) spending the bulk of the session in the red.
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