Should the U.S. Penny be Retired? Nowadays, the economic activity is thought of in terms of economics alone, even though that it is directly linked to socio-political situation in every country. In U.S., people are being told that the economy will function much better, once we rid it of certain traditions that have a largely nostalgic nature. The voices of those who suggest that Federal government needs to consider retiring U.S. penny coin are getting louder. They point out to the variety of reasons why a penny coin needs to be taken out of circulation.
The most important of them is the fact that pennys production cost is actually higher than its nominal value. In his article A Penny for Your Thoughts, and 1.4 Cents for the Penny Floyd Norris points out to the fact that production of one-cent coins is economically senseless: What happens if a penny is worth more than 1 cent? That is an issue the United States Mint could soon face, if the price of metals keeps rising. Already it costs the mint well more than a cent to make a penny (Norris).
Apart from this, proponents of pennys banning refer to Australia and Canada as countries, where one-cent coins were taken out of circulation. Their logic makes them think that this is a perfectly good reason for America to consider doing the same. Finally, self-appointed experts in the field of economy suggest that pennies are nothing but a nuisance, because people having a hard time, while trying to get rid of them.
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Such concern about ordinary folks, which is being expressed by wealthy proponents of Globalization, is very touching. However, it is much better to allow people to decide what they want for themselves. The results of various surveys suggest that majority of Americans are strongly in favor of maintaining the circulation of pennies. Fifty-five percent of Americans say the penny is “useful” and should be kept, according to a USA TODAY/Gallup Poll of 1,002 adults taken June 9-11, 2006. Support in the latest poll was split along gender lines. Sixty-three percent of women called the penny useful vs. 46% of men. Lower-income people support keeping the penny more than those who are wealthier says Barbara Hagenbaugh in her article A Penny Saved Could Become a Penny Spurned.
There is no doubt that, for many people, penny represent nostalgic value, but there is no reason to dismiss their opinions as unscientific. Even though proponents of Globalization are trying to convince us that American economy is self-efficient, this is not quite the case. Economy is just a reflection of societys spiritual health or sickness. The strength of social traditions is the necessary ingredient that enables society to successfully face political and economic challenges. Penny is the integral part of American economic tradition; therefore, it is crucial that we keep one-cent coins in circulation. If such practice becomes unprofitable, which is already starting to happen, Federal government will need to reconsider some of its foreign aid policies. Instead of wasting millions of dollars on helping the needy children of Somalia, who actually rarely see any help, or combating worlds hunger, our government will simply need to spend these money to subsidize penny.
Thus, the problem will be solved. Despite anti-penny propaganda, practice shows that one-cent coins are in high demand. Even though that his article is dedicated to exposing the inconveniences of having pennies in circulation, Floyd Norris admits that retiring one-cent coins would disrupt normal functioning of many commercial and non-commercial institutions: Pennies, meanwhile, are in high demand. Last year, the mint made 7.7 billion of them more than the number of all the other coins it produced. In the first three months of this year, the pace of penny production rose to an annual rate of 9 billion the highest since 2001. Retailers demand pennies from their banks, the banks demand them from the Federal Reserve, and the Fed orders them from the mint (Norris).
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It is a fact that pennys buying power has shrank considerably, since 1950. Nevertheless, there are many organizations and companies in U.S. that would be negatively affected, if government took pennies out of circulation. Such organizations include various charity funds, mining companies and lawyer associations. All of them are U.S. based. Retirement of penny would speed up the process of outsourcing, when more and more American companies move their production lines to Third World countries, while depriving Americans of their jobs. This is why we cannot think of retiring the penny out of socio-political context, as Globalization lobby wants us to.
We can say that U.S. Mint coins are only the equivalent of real value, because they contain valuable metals, while even a hundred dollar bill is nothing but a piece of paper. Up until 1971, Americans were able to exchange paper dollars for gold at the bank. However, from this time onwards, Federal Reserve has been printing dollars that only have a declared value, while exporting them to foreign countries, in order to avoid the rise of inflation in America. Today, the bulk of the money that circulates within U.S. is nothing but combinations of ones and zeroes, inside computers memory. In other words billions of dollars on bank accounts are actually nothingness.
All transactions between banks take place in electronic form. Therefore, the elimination of penny is only the first step towards banning coins altogether, because the pushers of Globalization strive to deprive people of monetary means that have any real value, since it is much easier to pay people for their work with currency that only has an imaginary worth. Thus, we cannot think of propositions to retire penny as some well-meaning attempts to free people of inconvenience of having to deal with rattling change in their pockets. In my opinion, these propositions are nothing but the part of onslaught on peoples civil freedoms. As saying goes road to hell is made out of best intentions. However, America is not Canada. The majority of Americans understand that retiring of penny should not take place, although they cannot explain why.
For them, it is simply something unthinkable. Still, it is wrong to describe peoples unwillingness to give up on penny by their inability to accept economic changes. Subconsciously, citizens feel that pennys real value is not monetary but metaphysical. Penny represents economic aspects of American Dream, which, in its turn, is the idea of universal freedom. This is why, if we retire penny, we might as well give up on the idea of free enterprise as one of foundations, upon which this country is built.
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Bibliography:
Hagenbaugh, B.
A Penny Saved Could Become a Penny Spurned. July 7, 2006. USA TODAY. Retrieved June 19, 2007 from http://www.usatoday.com/money/2006-07-06-penny-usa t_x.htm Efforts to Eliminate the Penny in the United States. 2006. Answers.Com.
Retrieved June 19, 2007 from http://www.answers.com/topic/efforts-to-eliminate- the-penny-in-the-united-states Norris, F. A Penny for Your Thoughts, and 1.4 Cents for the Penny. April 22, 2006. The New York Times. Retrieved June 19, 2007 from http://www.nytimes.com/2006/04/22/business/22chart s.html?ex=1303358400&en=a4046a4dea6fa38e&ei=5088&p artner=rssnyt&emc=rss Abstract: This paper discusses the reasons why U.S. penny should not be retired. Outline: Penny and economy Pp.
1, 2. Penny and politics P. 3..
