I've followed this development since it was first announced over a year ago. Canada has decided to ditch the penny, er, their penny which looks similar to ours. As of yesterday (2/4) the Canadian penny is no longer a valid form of currency and can only be used for payment if the merchant accepts it ( but since it isn't backed by the government why would they?). Our friends to the north will now round up or down prices. So if an item is $5.04, you will pay just $5 if paying in cash. If an item is $10.58, then you'd pay $10.60 unless paying by debit or charge in which case you pay the sticker price.
The reason is simple, it costs more money to make a penny than its worth. The Canadian Mint expects that this move will save taxpayers $11 million a year, which makes sense to ditch the cent.
So what about doing the same in the lower 48?
Not so fast says a recent survey that shows 2/3 of Americans still want the penny! WHHAATTT?!?!?! According to the US Mint, it costs 2 cents for every penny produced, so it doesn't take a rocket scientist to figure out keeping our nostalgic love of the penny is a pricey practice.
So in an era when there is a rumbling by citizens of government waste and talks of reducing the deficit, why are so many people stuck on producing pennies? According to Americans for Common Cents, a group (lobbyist in my opinion) aims to inform and educate policymakers, consumers, and the media about the penny’s economic, cultural, and historical significance says 77% of Americans are afraid merchants would simply raise prices and that cutting the penny would actually balloon government spending!!!!
Here is my opinion, this penny talk echoes a growing problem in our country, where we all talk about cutting wasteful government spending but none of us want to make the sacrifice to make those cuts. A "lower my taxes but keep my benefits" talk out of both sides of the mouth thinking that explains why government seems stalled in getting anything done! I understand the fear of prices going up but they are going up all the time and it generally not by a few pennies. And although Americans For Common Cents argue that it will increase federal spending because of the rounds ups, keep in mind it works with rounding down too. The simple math is that our country would save billions of dollars ditching a coin that is rarely used and ends up in a drawer in the kitchen or a can in the garage not being used. For me, I would welcome the elimination of our penny. To me, it makes sense.