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.
More on moneyNOW
We need three coins. The dime, a 50 cent piece that is a little bigger than a nickel, and a dollar coin that is a little bigger than a quarter.
Confiscate all pennies, nickels, and quarters and melt them down.
Pennys? Sure they cost money, but we use them.
How about all the money wasted on dollar coins that aren't even in circulation?
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.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
The NAHB Housing Market Index for September rose to 59 from 55, while the Briefing.com consensus expected the reading to climb to 56. Nasdaq +9.02 at 4561.77... NYSE Adv/Dec 1994/775... Nasdaq Adv/Dec 1545/784.
More Market News
An interest rate tease in The Wall Street Journal sends the market into an optimistic tizzy -- but one that doesn't end quite at the top.
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'