Thursday, April 5, 2012
APRIL 5 CANADA DITCHES THE PENNY--WHY NOT THE USA?
Normally, when Canadian finance minister JIM FLAHERTY releases his annual budget, it doesn't get a ton of publicity. However, last Friday's submission has everyone across the world's second largest nation in a furious debate. Why? Because of a controversial 'austerity measure.' It calls for the Royal Canadian Mint to cease minting any more pennies. Why is Canada abandoning something as essential to life as the copper penny? Simply because is costs more than one cent to mint a penny. "The penny is a currency without any currency in Canada, and it costs us 1.6 cents to produce a penny." FLAHERTY told reporters on Monday.
But...wait...if Canada gets rid of the penny...does that mean the US will too? No way! The penny is an integral part of our society...just imagine the nightmares that would occur if it goes away. Phrases like "A penny for your thoughts?" would become obsolete. Girls named Penny will loose their identity. All the Penny Arcades will go out of business. Let's face it: If we get rid of the penny, our financial and social worlds will collapse. Then again...maybe not. A government spokesman pointed out that Canada is not the first nation to ban the coin. Australia, New Zealand, Norway, Sweden...they've all "made smooth transitions to a penny-free economy." So...maybe it can be done?
Americans need to lose their sentimental attachment to the penny and face the facts. First of all, it's happened before. In 1857, the popular Half-Cent was officially taken out of circulation by the US Mint. People complained then...but aren't you glad today there are no more fractions of cents? Secondly, most pennies don't stay in circulation long. A 1996 study found that 72% of US pennies "simply disappear" in the trash or sewer. Thirdly, usage of all coins is at an all-time low...credit and debit cards are now used in two-thirds of all transactions. Finally, it's time to face the sad reality: Prices have gone up. A quarter in 2012 has less buying power than a penny did in 1940.