![]() This contributes to the United States Mint needing to produce more pennies than all other coins combined. the penny no longer serves that purpose." Pennies often drop out of circulation (for example, they are stored in jars in a person's home) and due to their low value are sometimes even discarded by consumers. Economist Greg Mankiw says that "The purpose of the monetary system is to facilitate exchange, but . ![]() Limited utility – Pennies are not accepted by any vending machines or by most toll booths, and are generally not accepted in bulk.The Federal Reserve says that replacing one-dollar bills with one-dollar coins would save an additional $500 million per year. Additionally, Whaples argues that eliminating the penny would coax people into using one dollar coins. Using a different calculation, Robert Whaples, a professor of economics at Wake Forest University, estimates a $300 million annual loss. If it takes only two seconds extra for each transaction that uses a penny, the cost of time wasted in the US is about $3.65 per person annually, or about one billion dollars for all Americans. Thus, it is not worthwhile for most people to deal with a penny. Lost productivity and opportunity cost of use – With the median wage in the US being $20.17 per hour in 2020, it takes less than two seconds to earn one cent.Also, the price of the raw materials from which the penny is made exceeds the face value, so there is a risk that coins will be illegally melted down for raw materials. This results in an annual loss to the U.S. Production at a loss – In 2020, it cost 1.76 cents to mint a penny.The bill died at the end of the 115th Congress with no hearings held by the Senate Committee on Banking, Housing, and Urban Affairs. 759, the Currency Optimization, Innovation, and National Savings (C.O.I.N.S.) Act of 2017, that would stop minting of the penny for 10 years and would study the question of whether production could cease thereafter. In 2017, Senator John McCain and Senator Mike Enzi introduced S. While the bills received much popular support from the public, all failed to become law. 2528, and in 2006, he introduced the Currency Overhaul for an Industrious Nation (C.O.I.N.) Act, H.R. ![]() In 2001, Kolbe introduced the Legal Tender Modernization Act of 2001, H.R. 3761, to eliminate the penny in cash transactions, rounding to the nearest nickel. In 1990, United States Representative Jim Kolbe introduced the Price Rounding Act of 1989, H.R. The most recent time that the United States withdrew the lowest-value coin from circulation was with the half-cent coin (hay-penny), which was withdrawn in 18 half-cent coin was worth approximately 16 cents in 2022 dollars. Other countries have also withdrawn coins no longer worth producing, such as Canada ending production of the Canadian penny in 2012. Such bills would leave the five-cent coin, or nickel, as the lowest-value coin minted in the United States. Congress would have ceased production of pennies, but none have been approved. The penny costs more to produce than the one cent it is worth, meaning the seigniorage is negative – the government loses money on every penny that is created. A debate exists within the United States government and American society at large over whether the one-cent coin, the penny, should be eliminated as a unit of currency in the United States. ![]()
0 Comments
Leave a Reply. |