Next time someone mentions "government efficiency" just ask them how that's working out when it comes to making pennies. It's a long-running joke that the U.S. Mint has been playing on itself (and the American citizen)! Is it time to think about ending the one-cent coin? Let's take a look!
Here are Five Fast Facts about getting rid of the penny:
- 🙃 Upside Down Value - Producing and circulating a single penny costs about 3.7 cents, turning each coin into a tiny money pit.
- 🤷 Rounding The Bend - One option is to round prices to the nearest nickel. Studies suggest that doing so wouldn't significantly impact consumers or inflation, though businesses would likely adjust prices to result in a lot more rounding up than rounding down. Yeah, we're shocked about that, too.
- 💵 Cash Is Still (Kind Of) King - Despite the majority of transactions happening with a credit or debit card nowadays, there has been a recent rise in cash use. In 2023, 90% of Americans said they've used cash in the previous month, up from 80% the two years before that.
- 👀 Peer Pressure - Nations like Canada, Australia, and New Zealand have ditched their smallest coins without economic trouble, suggesting the U.S. could do it, too.
- 🤔 Missing The Point - Some analysts say that the debate over pennies is missing the bigger point about financial wellness - bank account ownership. In 2023, about 4% of Americans didn't have a savings or checking account! With so many transactions happening digitally now, most people don't even think about pennies anymore, but they do need digital accounts of some kind.
🔥Bottom line: While the penny has had a long run, it's become more of a costly keepsake than a practical piece of currency. Phasing it out could save money, streamline transactions, and free us from the burden of lugging around coins that even vending machines don't want.
What do you think we should do about pennies?
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