Recently, the Los Angeles Times published a story about the 4 new pennies being released this year in honor of Abraham Lincolns 200th birthday. In the article it mentions;

given the rising price of zinc and copper, it costs about 1.4 cents to make a penny

This raises the question, why do we even continue to make the penny. According to the Wall Street Journal, until around 1999 it had cost about 9/10 of a cent to make a penny. That comes out to about $400 million of profit or seigniorage as the Mint likes to call it.

With numbers like these, it was understandable why we were using the nations zinc and copper to produce a coin that most people don’t even keep track of. But now, with the creation of pennies costing us around $1.6 billion to mint each year (above what they are worth), what is the point of keeping them around? The world would function just fine without them.

Several people have suggested that it would be more difficult to buy with cash without using the penny but I don’t think that would be so. The final price of a product, tax included, would be figured as usual then rounded up or down to the nearest $.05. With the use of credit/debit card for purchases, most things are paid for without cash anyways. And when you consider the fact that gasoline is priced to the tenth of a cent and pretty much anything incurring interest deals in fractions of a penny and everything works out fine, I can’t see any reason to keep it around. Heck, it might even be better to round to the nearest $.10 and get rid of the nickel as well. Then we could use the metal to mint $1 and $5 coins that would stay in circulation for 30 to 40 years instead of paper bills which only last 13 – 18 months.

If anyone knows somthing that I don’t, please let me know. I’m sure there are other factors but I also know that we would not be the first country to do this. Several European countries have eliminated their $.01 (and in some cases thier $.02) pieces and just operate as I’ve explained above.