Time has come to abolish the worthless penny

WASHINGTON — Because my staunch support of the war in Iraq has generated such overwhelming reader enthusiasm, it's time to re-establish my contrarian credentials. (Besides, I need a break.) Here's a crusade sure to infuriate the vast majority of penny-pinching traditionalists:

The time has come to abolish the outdated, almost worthless, bothersome and wasteful penny. Even President Abraham Lincoln, who distrusted the notion of paper money because he thought he would have to sign each greenback, would be ashamed to have his face on this specious specie.

That's because you can't buy anything with a penny any more. Penny candy? Not for sale at the five-and-dime (which is now a "dollar store"). Penny-ante poker? Pass the buck. Any vending machine? Put a penny in and it will sound an alarm.

There is no escaping economic history: It takes nearly a dime today to buy what a penny bought back in 1950. Despite this, the U.S. Mint keeps churning out a billion pennies a month.

Where do they go? Two-thirds of them immediately drop out of circulation, into piggy banks or — as The Times' John Tierney noted five years ago — behind chair cushions or at the back of sock drawers next to your old tin-foil ball. Quarters and dimes circulate; pennies disappear because they are literally more trouble than they are worth.

The remaining 300 million or so — that's 10 million shiny new useless items punched out every day by government workers who could be more usefully employed tracking counterfeiters — go toward driving retailers crazy. They cost more in employee-hours to wait for the buyers to fish out, then to count, pack up and take to the bank, than it would pay to toss them out. That's why you see "penny cups" next to every cash register; they save the seller time and the buyer the inconvenience of lugging around loose change that tears holes in pockets and now sets off alarms at every frisking-place.

Why is the United States among the last of the industrialized nations to abolish the peskiest little bits of coinage? At the G-8 summit next week, the Brits and the French — even the French! — who dumped their low-denomination coins 30 years ago, will be laughing at our senseless jingling.

The penny-pinching horde argues: Those $9.98 price tags save the consumer 2 cents because if the penny was abolished, merchants would "round up" to the nearest dollar. That's pound-foolish: The idea behind the 98 cents (I can't even find a cent symbol on my keyboard any more) price is to fool you into thinking that "it's less than 10 bucks." In truth, merchants would round down to $9.95, saving the consumer billions of paper dollars over the next century.

What's really behind America's clinging to the pesky penny? Nostalgia cannot be the answer; if we can give up the barbershop shave with its steam towels, we can give up anything.

Comments