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.

By Aimee Picchi Feb 5, 2013 12:25PM

Canadian pennies (Michael Fiala/Reuters)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. 


More on moneyNOW

339Comments
Feb 5, 2013 3:32PM
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Save the penny and get rid of all those worthless politicians that aren't worth a penny
Feb 5, 2013 1:25PM
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Yes and get rid of that stupid 9/10 on the gas pumps. Why in the world do they price gas at 3.29 9/10, why not just 3.30?
Feb 5, 2013 1:22PM
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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.

Feb 5, 2013 3:40PM
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Knock Knock Knock

PENNY

Knock Knock Knock

PENNY

Knock Knock Knock

PENNY......

Feb 5, 2013 2:42PM
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We should get rid of the penny and the nickel right now.  Just move to tenths of a dollar only and round everything to that.  Things cost ten times what they were when the penny was way more relevent anyway.
Feb 5, 2013 3:22PM
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Anytime your currency cost more to make then it is worth you should dump it! The rate D.C. is going we might as well start discussing when we dump the dollar!!!
Feb 5, 2013 3:09PM
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Dump the penny. Dump it. Dump it now.
Feb 5, 2013 3:20PM
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Typical US Government manuver.  Spend a dime to save a penny....
Feb 5, 2013 3:45PM
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Every body that has a problem with pennies you are more than welcome to send All of them to me. I dont discriminate on money. Thank you
Feb 5, 2013 3:13PM
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What would all the 99 cent stores do?
Feb 5, 2013 3:26PM
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No, you don't need to get rid of the penny, just mint them every 5 to 10 years.  We all know they last for at least 50 years.  Do that for all coins not just pennies.


Feb 5, 2013 3:14PM
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Pennys? Sure they cost money, but we use them.

How about all the money wasted on dollar coins that aren't even in circulation?

Feb 5, 2013 3:33PM
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Most small business Point of Sale systems are no equipped to round up (or down) sales taxes. However, a terrific idea would be to simultaneously get rid of the penny AND make all advertised prices INCLUSIVE of tax. Just like they do in just about every other country in the world!
Feb 5, 2013 3:20PM
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My fear is if you drop then penny then it will all add up.  Instead of having a 6% or 7% tax on the items you buy in the store, it's going to be raised to a 10% tax to make the numbers all round out to either the nearest nickel or nearest dime.  Over the course of a year it will add up how much you're spending out of your pocket.  Either that or you're just just going to be S.O.L. and end up paying extra for something because you're paying with cash instead of plastic.
Feb 5, 2013 12:51PM
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Canada also started producing plastic money. The $100, $50 and the $20 are all plastic. Advantages, less trees cut, they last longer, extremely hard to reproduce and if your wallet falls in water they are waterproof. The only disadvantage I can find is when counting money they are stickier!
Feb 5, 2013 2:46PM
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yes,yes,yes! It is so irritating to carry around all those pennies we receive in change from purchases, You can't buy anything with a penny anymore. I remember a time when you could, but those days are long gone and you are not fooling anybody with the $1.99 price versus just $2.00. Just make it $2.00 please,and make us penny free. about all you can do with a penny is save up a can or big jar full of them and cash them in at the coinstar machines. which in turn makes the government mint more pennies to make up for all the pennies being saved up. which costs us more than the penny we are saving on the price!!! Get a clue Government, Yes Indeed GET RID OF THE PENNY!!!!!
Feb 5, 2013 3:34PM
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BY ALL MEANS DUMP THE PENNY !!! We spent $120 miliion to produce $50 million in pennies?  Why  is this even being debated?  I can think of a bunch of things we can do with $70 million instead of producing pennies  (which end up in your desk at work, glass jars and cans at home , dressers, pockets, and pretty much anywhere else you look...) The penny is long outgrown it's usefulness
Feb 5, 2013 3:33PM
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All we need to do is round the final total of all transactions down to the nearest nickle and there wouldn't be any need or use for a penny; they would go away on their own. 
Feb 5, 2013 3:53PM
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Sure drop the penny, but you'll see a lot of rounding up. We the consumers will get more inflation.
Feb 5, 2013 4:28PM
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NO! NO! NO!  -  Keep the penny.  My dad had a penny bank. It was shaped like the liberty bell. When I left home I got a ceramic bank to drop my pennies in each evening. 

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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