The usual arguments are advanced. There is a general coin shortage now anyway due to the slowing of the economy due to the coronavirus and the pandemic; more people are using digital transactions to buy things. And perhaps the most businesslike reason advances, it costs 2¢ cents to make a 1¢ coin. There'is a concept I wasn't aware of: the government is supposed to make money, or at least break even. When?
Paul Volcker once said "money has velocity," and right now it's moving as slow as molasses in winter.
The latest story I read was in yesterday's NYT. And count on The Times to trot out a quote from someone from Harvard or Yale. Jenny Gross's story includes an observation from N. Gregory Mankiw, an economics professor at Harvard University who says the argument for getting rid of the penny "has only gotten stronger over the decades, as inflation has suppressed the penny's purchasing power." Still, he said he did not think, "any changes would happen soon."
He's got that right. The penny is as good as protected by an unworded Second Amendment, just as the worded Second Amendment protects the right to bear arms. Say goodbye to the penny and weapons? Fuhgetaboutit!
Our northern neighbor Canada seems to be the most progressive on making changes to their physical currency. They long ago eliminated the $1 and $2 denominations of their paper money and replaced the bills with coins—durable metal—called Loonies and Twonies, $1 and $2 coins distinguished by how many loons (waterfowl, not politicians) are depicted on the back of the coin.
Ms. Gross's story also tells us Canada stopped making the 1¢ coin in 2012. I guess the elimination of the coin will occur through attrition. Eventually, there will be so many in jars, drawers, cans and piggy banks throughout the provinces that there will no longer be any in general circulation. A deadline will be declared on redeeming the pennies for credit, and the extinction will be complete.
Arguments for keeping the penny are weak. There is the sentiments that it will amount to a 1¢ sales tax on items costing 99¢. This is bogus. Just make te floor rpice $1 and Bob's your uncle, no one will realize they might b paying an unseen tax.
Then there's the argument that the older pennies are made of copper, a metal that resists holding onto germs. Thus, rubbing your hands with fistfuls of old pennies will introduce sanitary handling of money. Older pennies are antimicrobial, perfect for the pandemic era.
Rubbish. How many "old" pennies do you see? In 1982 the metal composition of the penny went to 2.5% copper and 97.5% zinc. Copper became far too valuable to use to make a 1¢ coin. Copper was being vandalized from wires in electrical boxes and tunnels and melted down for its value. Pennies were ripe candidates for the smelting pot.
With my grammar school education that started in the early '50s, I can never forget what we learned of presidents and American History. And part of that history was always Benjamin Franklin, the guy who captured electricity by tying a key to a kite's string and standing in a lightening storm; the guy who invented bifocals; the guy who signed the Declaration of Independence; the guy who designed a stove.
More modern depictions of Franklin's role in American history were when they aired the miniseries on John Adams starring Paul Giamatti and Laura Linney, when Adams opens a bathroom door in France and interrupts Franklin, who is sitting naked in a bathtub with a naked, older but quite preserved looking French woman. I think they're playing cards, or chess, and probably footsies.
Franklin was a man about town, and apparently was popular with the ladies on both sides of the Atlantic. He was never part of any cabinet position, but was an ambassador to Sweden and France. We was the first Postmaster General. He was instrumental in getting the Paris Peace Treaty signed that ended the first war with Britain. The big one we call the American Revolution.
Yanking out my seldom used edition of Bartlett's Familiar Quotations there are two and a half pages of his utterances, but amazingly nothing about the penny. The Wikipedia entry does acknowledge the sentiment taken from Franklin's 'Poor Richard's Almanac, "A penny saved is twopence dear" (often misquoted as "A penny saved is a penny earned." Franklin also famously said of house guests: "Fish and visitors stink in three days." He certainly get a lot of things right.
Ms. Gross points out correctly that only Congress has the power to eliminate the coin, and past efforts have proved elusive. "The biggest change was in 1857 when the Congress discontinued the half cent, which was unpopular."
She tells the story of "Jim Kolbe, a Republican from Arizona who once introduced legislation in the early and mid-2000s to eradicate the penny while he was in Congress. His efforts were stymied because Dennis Hastert, then the House speaker and other representatives from Illinois opposed the legislation, in part because the penny since 1909 has carried the image of Abraham Lincoln, who spent eight years in the Illinois legislature."
The introduction of Lincoln on the penny starting in 1909 was a commemorative celebration of the centennial of his birth. Lincoln's image replaced the Indian Head penny. Imagine an Indian Head penny being in circulation today. It wouldn't stand a chance.
So, will the next attempt at legislation to eliminate the penny result in a Patrick Henry-like speech from the floor of the House of Representatives, quoting Benjamin Franklin on the virtues of thrift?
Not a chance.
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