Get Rid of the Penny!

It's time to get rid of the penny. With news that pennies now cost more than a cent to manufacture, it's time to reconsider the penny coin's usefulness.

With today's prices, where even a gumball goes for 25 cents or more, there is no need for pennies in cash transactions! Pennies simply accumulate in old coffee cans and jelly jars.

I propose that every cash transaction be rounded up to the nearest nickel, with shop owners (not the government!) keeping the difference. All non-cash transactions would still be calculated to the penny.

In the average transaction, a customer would only pay 2 cents more when rounding up to the nearest nickel. In the best case, there's no difference at all. In the worst case, the difference is only 4 cents. That averages less than 1% of the typical cash transaction above $2.

Let's take a look at all 100 possible combinations of change in a cash transaction: from 0 cents change, to 99 cents change. In all 100 of these transactions you use the following numbers of each coin:

• Pennies: 200 coins, 2.0 average per transaction


• Nickels: 40 coins, 0.4 average per transaction


• Dimes: 80 coins, 0.8 average per transaction


• Quarters: 150 coins, 1.5 average per transaction


• Total: 470 coins, 4.7 average per transaction

Now lets look at all 100 combinations of change in a penniless world (where each transaction is rounded up to the nearest nickel):

• Pennies: 0 coins, 0.0 average per transaction


• Nickels: 40 coins, 0.4 average per transaction


• Dimes: 80 coins, 0.8 average per transaction


• Quarters: 150 coins, 1.5 average per transaction


• Total: 270 coins, 2.7 average per transaction

You can see that in a penniless world, we would use zero pennies and exactly the same number of every other coin! The average number of coins in change drops from 4.7 to 2.7 per transaction - more than 42% fewer coins!

Opponents of eliminating the penny include charities who raise money by collecting pennies. My God! I see a huge opportunity there - collect nickels and dimes instead!

Some claim that the poor transact mostly in cash, placing an undue burden on them. In that case, the rounding could be made neutral by changing the rule to round down to the nearest nickel any transaction that would result in 1 or 2 pennies in the change, and rounding up to the nearest nickel any transaction that would result in 3 or 4 pennies in the change. On average, this results in zero difference from actual amount paid using exact change to the penny.

Other opponents, like the Congressional delegation from Illinois where Linclon spent most of his adult life, want to see Lincoln continued to be honored with a coin. Well, he's already on the $5 bill - a much greater honor than the lowly penny!

Cash only adds value to the economy when it is used - but most pennies are simply stored, meaning the cost to manufacture them must be borne for little economic value. Eliminating the penny will reduce the overall cost of minting coinage, and reduce the frustration of storing a surfeit of pennies.