Since Jim Globe, the United States Representative, introduced the bill to eliminate pennies in 2002 and 2006, this issue has brought strong arguments. Even though his proposals failed, many people start to believe that making pennies is a waste of time and money. Eventually, people make non-profit organizations, such as ‘Penny for peace’, ‘Penny for the planet’ to keep pennies, or ‘Kill the penny which is against pennies. They even make videos and try to spread their opinion through You-tube. It is true that the penny is the smallest monetary unit in this country, and there is toting that people can buy with a penny anywhere.
Lots of Americans, however, still think that they need pennies. In practice, the penny influences our lives in many ways because it is deeply related to economics. To be specific, the penny, as a basic monetary unit, can affect prices. If the nickel replaces the penny, everything will be expensive. Charitable institutions and some businesses will take a hit directly without the penny. Furthermore, if government stops making pennies, they would spend more to make and circulate nickels. Therefore, the United States government should pep the pennies and find solutions to collect and reuse them wisely.
Most of all, keeping the penny is a popular opinion. According to the USA TODAY Gallup Poll, seventy-two percent of respondents said they want to pick a penny up on the street rather than leave it there. Sixty-three percent of women and forty-six percent of men; an average of fifty-five percent of Americans said the penny is useful and should be kept. To put this result concretely, sixty-five percent of lower income people who earn less than $30,000, fifty-four percent of middle income people who earn between 30,000 and $75,000, and forty-five percent of wealthier people who earn over $ 75,000 answered pennies are useful (Carroll).
These statistics show many Americans still have affinity with pennies and lower income people consider pennies more important than the wealthier do. Since nearly two in three Americans’ earning is less than $30,000, the influence of the penny is much higher than Just numerical values of surveys Jacob). People still see the penny is worth keeping in the U. S. Currency system; the penny helps to keep the transaction precisely. It helps to manage the budget. People know sum of small values become respectable value when it is gathered up [this could be stated more succinctly]. Even though a penny is the lowest monetary in the U.
S. Currency system, it does not mean it is the lowest monetary in the world currency system. The small value of the penny can still change things in the world. If the pennies are disposed, the transaction would be rounded up or down to the nickels. It could bring severe financial crisis to the world. One of the obvious results of abolishing the penny is inflation. Without the penny, every price would be rounded up or down to the nickel. The serious problem is that most of merchants would increase prices to compensate for their loss regarding the prices that they have to round down.
Over three-quarters of Americans answered that they will worry about rising prices due to merchants’ favor if pennies are abolished. It probably is true. Raymond Lombard, Ph. D. , a professor of Economics at Penn State University, told a congressional committee that rounding cash sales up or down to the nearest fifty cents would cost consumers over $600 million annually. He also estimated that inflation from rounding up would lead to an extra $1 billion in overspent spending over five years because many government payment programs are tied to notation (Lombard).
Moreover, the government should d think about the tax system without the penny. Even though the original price of every single product is rounded up or down, consumers also have to calculate tax. Usually, it comes out to some pennies; if consumers do not have pennies, the grand total of a product needs to be rounded again because of the tax. It would be a big burden to not only all consumers but also to the government, and will bring a sharp increase in prices. Some specific businesses will suffer greatly. Charitable institutions, especially, which depend on pennies will have difficulties in collecting funds.
There are thousands of charities which are operated by donations of pennies such as schools, stores, companies, and various organizations. Most of non-profit businesses succeed to collect fund with pennies. Everybody has a penny, [this is a comma splice] it is easy to find a coin donation tray in front of a cash register in a store; people are willing to put pennies there. Students and even children would like to donate pennies in the jar at their home. According to Haughtier, “In 2005, children in New York City elected more than million pennies for a total of $655,508. 4”. One cent does not have big value, but when it is gathered up, it can make a big difference. By collecting pennies, people can prepare for some crisis or aid to disaster areas. The collected pennies can save people in this country and it can also help others overseas as well. The worth of a penny is much higher in the poor countries. Jeffery Cash, an economist at Columbia University, said that pennies can save and educate the poorest in the world by supplying foods, vaccinations, and sending children to school, etc.
In addition, Cash also explained that if eighty million people who live in the richest country put aside only one penny out of every $10 for health care in the poorest countries, they could save eighty million lives a year. If a person dropped a penny on the street, the person ignores the life which can be saved by a penny. Life is not comparable to any value, [CSS] if a penny can save a life, people do not have any reason to abolish the pennies. The opponents of pennies mainly claim that the cost of making pennies exceeds their face value so that the government wastes the budget.
It is true that making a penny costs 2. 4 cents. The government needs to spend almost 900 million to make and circulate pennies. In contrast, however, the cost of a nickel is more expensive than cost of a penny in producing. If pennies disappear in the currency system, the government would make more nickels. The cost of a nickel is 11 cents to be produced (“2011”). It costs over four times than making a penny. A five cents nickel contains 75 percent copper and 25 percent nickel [You must cite this information! ]. As the materials of a nickel increase, the cost of making a nickel would definitely go up.
Therefore eliminating the penny cannot save government’s money. Pennies are not disposable coins. Depending on how the government collects and circulates pennies, and what materials being used to make pennies, they can save production expenses in the long term. Americans need to find solutions, such as changing materials, or making an individual penny-save . Accumulating pennies and paying people back when it reaches 100 dollars or gives some more sums of pennies with the tax refunds would be a suggestion that the government should implement. Last February, the Obama administration asked
Congress to change the mix of materials which can make pennies cheaper . Even though the Treasury department has been studying the new combination of metals since 2010, they nave not Dunn an ideal mixture yet(leisured). However, this is the best way to decrease costs. Americans have to devise to collect and reuse pennies, or make cheaper pennies instead of Just abolishing them. Abandoning the penny without a plan can bring severe damages to the United States economic system. The government needs to be cautious for implementing a new system. It also applies to the smallest monetary value of the U. S. Currency system.
When a changed policy can bring a crisis, the government needs to check all possibilities. The majority of Americans prefer to keep the penny because they think it is useful. If they eliminate pennies, it will cause considerable economical problems. First, it will lead to inflation which hurts both consumers and government. Second, lots of charities and penny- related companies will suffer. Some people who support elimination of the penny say the cost of making one penny is over its face value, but even with abolishing pennies, the government cannot save money because the producing cost of the nickel is more expensive.
