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Why We Should Get Rid of Pennies By Andrew Welke
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Reasons Cost more to make Waste your time They don’t work as money They get less valuable as inflation increases.
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History The penny was made in 1972 – Made of 100% pure copper at the time – It was worth what is now a nickel today As time went on… – The value of copper went up – Inflation lowered the value of money – Which forced the mint to make the penny 2.5% copper and 97.5% zinc
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Impact The U.S makes 4 billion pennies each year. Each penny costs about 1.4 cents to make each penny In 2011 it cost the FY $60,200 dollars So a lot of our hard earned wages goes to subsidizing the penny. It would be better to use a different form of material like steel, plastic or lint
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The purpose of pennies You don’t want to overpay for anything. Money exists to facilitate the goods and exchange of services YOU CAN’T DO THAT WITH PENNIES!
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But there is 1 machine
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IT TAKES 10% AWAY OF THE MONEY YOU ALREADY HAD AND GIVES BACK NOTHING IN RETURN!
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They Are a Deadweight to the Economy!
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Pennies are worth less than nothing There is an idea called Opportunity Cost. – Basically, if you are doing something, you could be doing something else, like earning money.
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Pennies are worth less than nothing There is an idea called Opportunity Cost. – Basically, if you are doing something, you could be doing something else, like earning money. It is estimated that Americans lose a billion dollars of money just fiddling with pennies – Especially if you get exact change in the checkout line.
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Visualize You go to the bank with 2,000 pennies ($20 weighing eleven pounds)
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Visualize You go to the bank with 2,000 pennies ($20 weighing eleven pounds) You say “I have these pennies here, can I get 24 dollars in return?” AND THEY SAY YES!
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Visualize You go to the bank with 2,000 pennies ($20 weighing eleven pounds) You say “I have these pennies here, can I get 24 dollars in return?” AND THEY SAY YES! THAT IS WHAT IS HAPPENING AT THE U.S. MINT!
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WHY DO WE STILL HAVE THESE!?
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We are sentimentalists
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WHY DO WE STILL HAVE THESE!? We are sentimentalists – People like the penny – People like Abraham Lincoln (He is the only one facing right.)
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WHY DO WE STILL HAVE THESE!? We are sentimentalists – People like the penny – People like Abraham Lincoln (He is the only one facing right.) If Lincoln was alive today…
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WHY DO WE STILL HAVE THESE!? We are sentimentalists – People like the penny – People like Abraham Lincoln (He is the only one facing right.) If Lincoln was alive today… His face will still be on the $5 bill!
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WHY DO WE STILL HAVE THESE!? We are sentimentalists – People like the penny – People like Abraham Lincoln (He is the only one facing right.) If Lincoln was alive today… His face will still be on the $5 bill! People are afraid prices will rise and charitable donations will drop The only company that benefits is a zinc company in Tennessee called Jardon Zinc Products
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The Solution Get rid of the penny and round to the nearest 5 cent for cash transactions.
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Rounding 10 9 8 7 6 5 4 3 2 1
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Rounding 10 9 8 7 6 5 4 3 2 1
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Rounding 10 9 8 7 6 5 4 3 2 1
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Rounding 10 9 8 7 6 5 4 3 2 1
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Rounding 10 9 8 7 6 5 4 3 2 1
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Rounding 10 9 8 7 6 5 4 3 2 1
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Drawback Cheaters
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The Solution Get rid of the penny and round to the nearest 5 cent for cash transactions. – People are afraid prices will rise and charitable donations will drop
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The Solution Get rid of the penny and round to the nearest 5 cent for cash transactions. – People are afraid prices will rise and charitable donations will drop Many countries have done this and there has been no change in their economy. – Canada, New Zealand, Australia, Finland, Netherlands No prices rose or charitable donations dropped
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Experience We have gone through this process before. – The U.S. mint discontinued the half-cent in 1857 because it was worth too little – No prices rose – (But It had greater buying power than today's dime!)
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Is it Unpatriotic? Not exactly, our U.S. military in oversea bases abolished the penny and rounded to the nearest 5 cents.
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This is not a political issue
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It is a rational issue
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References Images – http://www.kungfuquip.com/wp- content/uploads/2011/02/800622_lg.jpg http://www.kungfuquip.com/wp- content/uploads/2011/02/800622_lg.jpg – http://larry5154.files.wordpress.com/2011/07/vending-machine.jpg http://larry5154.files.wordpress.com/2011/07/vending-machine.jpg – http://getentrepreneurial.com/wp- content/uploads/2012/04/laundromat-dryers.jpg. http://getentrepreneurial.com/wp- content/uploads/2012/04/laundromat-dryers.jpg – http://upload.wikimedia.org/wikipedia/commons/0/0c/2010_cent_ob verse.png http://upload.wikimedia.org/wikipedia/commons/0/0c/2010_cent_ob verse.png Info http://www.snopes.com/business/money/pennycost.asp http://www.youtube.com/watch?v=y5UT04p5f7U&list=PLqs5ohhas s_QZtSkX06DmWOaEaadwmw_D&index=10&feature=plcp http://www.youtube.com/watch?v=y5UT04p5f7U&list=PLqs5ohhas s_QZtSkX06DmWOaEaadwmw_D&index=10&feature=plcp – http://www.youtube.com/watch?v=77C47XYm_3c&feature=related http://www.youtube.com/watch?v=77C47XYm_3c&feature=related – http://en.wikipedia.org/wiki/Half_cent_(United_States_coin) http://en.wikipedia.org/wiki/Half_cent_(United_States_coin) – http://en.wikipedia.org/wiki/Penny http://en.wikipedia.org/wiki/Penny
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