INFLATION RAISES QUESTIONS: Abolish the Penny?
If you are reading this and live in America, or used to live in America, or maybe just went to America one time many years ago, then you are almost certainly performing unpaid labor for the U.S. government and have been for years. How? By storing some of the billions of pennies the U.S. Mint makes every year that virtually no one uses.
Why are we still making tons (many thousands of tons) of pennies if no one uses them? That’s a sensible question with a psychotic answer: We have to keep making all these pennies — over $45 million worth last year — because no one uses them. In fact, it could be very bad if we did.
When you insert a quarter into a soda machine, that quarter eventually finds its way back to a bank, from which it can be redistributed to a store’s cash register and handed out as change — maybe even to you, who can put it into a soda machine again and start the whole process over. That’s beautiful. (Please be mindful of your soft drink consumption.)
But few of us ever spend pennies. We mostly just store them. The 1-cent coins are wherever you’ve left them: a glass jar, a winter purse, a RAV4 cup holder, a five-gallon water cooler dispenser, the couch. Many of them are simply on the ground. But take it from me, a former cashier: Cashiers don’t have time to scrounge on the sidewalk every time they need to make change. That is where the Mint comes in. Every year it makes a few billion more pennies to replace the ones everyone is thoughtlessly, indefinitely storing and scatters them like kudzu seeds across the nation.
You — a scientist of some kind, possibly — might think an obvious solution now presents itself: Why not encourage people to use the pennies they have lying around instead of manufacturing new ones every year? We can’t! Or, anyway, we’d better not. According to a Mint report, if even a modest share of our neglected pennies suddenly returned to circulation, the result would be a “logistically unmanageable” dilemma for Earth’s wealthiest nation. As in, the penny tsunami could overwhelm government vaults.
That’s not great, but at the end of the day we’re talking only about pennies. How much could a penny cost to make? A penny? If only we lived in such a paradise. Unfortunately, one penny costs more than three pennies (3.07 cents at last count) to make and distribute!
When I learned this, I lost my mind.
Pennies used to be worth enough to be useful. “Recall that when Roosevelt installed Lincoln on the cent, the coin was worth more than a quarter in today’s money.” They’re now worthless — except you want to keep a few so as to make correct change so you don’t get more pennies — because the money is worthless due to inflation. Copper, zinc, labor, etc. are not worthless so pennies are worth less than they cost to make.
Inflation is always and everywhere a monetary phenomenon, so this is the fruit of government overspending for decades. But relax — it will soon get worse.