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Phasing Out the Penny, Cost of Production Exceeds Value

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http://articles.moneycentral.msn.com/News/TimeToKillOffThePenny.aspx?GT1=8376

 

 

In May, the U.S. Mint informed Congress that the cost of making a penny and a nickel will soon exceed the actual value of each coin. Thanks to the high cost of materials that go into the making of the coins -- zinc, copper and nickel -- the Mint estimates that by the end of the fiscal year, the cost of producing one penny will come to around 1.23 cents, and the cost of making a nickel will be 5.73 cents.

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This is a pet peeve of mine.  Long ago Margaret Thatcher updated Britain's coinage at great savings.  They eliminated the 1-pound note and replaced it with a coin.  All the other coins were significantly reduced in size.  Their old dime, nickels and pennies were big and heavy.  Now they are thin and tiny.  Only the 1-pound coin is thick.  It makes sooo much sense once you see it in action.  Apparently the vending machine industry here has a strong lobby, as they are against any changes.

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I have a hard time understanding how we would phase out pennies; they're pretty important. Almost every store has merchandise ending in 99, 97, 49 cents, etc. Everything would have to be multiples of 5. Sales tax would have to be rounded up, and cause a huge surplus of money.

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actually they talk about this all the time, if you get your hands on pre 1982 pennies their worth about 1.79 c, beacuse they have more copper in them. to deal with the 99 c  items " Kolbe's 2001 legislation proposed that cash transactions ending in 1, 2, 6, or 7 cents should be rounded down to the nearest 5 cents, while transactions ending in 3, 4, 8, or 9 cents would round up. Credit and debit card transactions could still be valued to the nearest cent. "

 

http://money.cnn.com/2006/06/01/news/newsmakers/penny/index.htm

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This post is coming back from the dead.

 

Many of you have probably already seen this, but here is a really good explaination as to why pennies should be finished. Canada stopped producing pennies in May of this year.

 

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