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June 16, 2005
No Cents At All
I hate pennies.
I suppose it's unusual to be set off on a grumpy rant by a tiny piece of copper. But I suspect that I'm hardly alone in disdaining the most useless element of America's financial scene this side of that 9/10 of a cent they use in gas prices. (And don't even get me started on that conspiracy.)
In a nutshell, pennies suck. There's simply no reason for them. 10 billion pennies are minted every year. For what? When was the last time a penny bought anything? Anything? A candy bar? A piece of gum? A favor from a crack whore? Anything? The government prints and mints money so that we can use it, right -- that whole funky exchange of goods and services thing someone tried to teach us about back in third grade. Well, if no one can use a coin to actually buy anything, then what's the point of minting it?
As near as I can tell, pennies exist for only two reasons. The first is so that retailers can play mind games with buyers about the true cost of an item. "No sir, it's not $100... it's $99.99!... Oh! Well in that case, it's not as expensive as I thought, I'll take it." There's a psychological barrier about nines and going up in price from three digits to four, or four to five, or what have you. Were there no pennies, retailers would not be able to use that barrier to sucker us into buying stuff we don't need.
The second, equally nefarious reason pennies are made is to create a market for the companies that make the little blue plastic "take a penny, leave a penny" bins. Without the US Treasury's continued minting, the whole take-a-penny-bin industry would enter free fall, putting thousands of automated factory machines out of work.
Believe it or not, the US Treasury claims that pennies are profitable. "Each penny costs .81 of a cent to make, but the United States Mint collects one cent for it. The profit goes to help fund the operation of the United States Mint and to help pay the public debt."
Okay, first of all, the last time anyone looked, that extra 19/100 of a cent here and there just wasn't doing a whole lot of good in paying off the public debt, which as of Wednesday was closing in on $8 trillion dollars. I mean, if we're all that concerned with knocking down some of that debt, couldn't we find a more efficient method of payment than 19/100 of a cent at a time? This is kind of like someone who makes $10 minimum payments on a $2000 credit card balance, pays $28 in interest that month, and then claims to be paying down his credit cards. (Actually, were the metaphor extended all the way out, the person here would actually use the credit card to pay to print out the $10 bill he was using to make that minimum payment, thus increasing his overall balance by printing the money with which to pay it off.)
However, it's good to know that every morning when I'm in the company cafeteria and buying my French Roast or Colombian Supremo, and I drop those three useless pennies into the little blue take-a-penny bin (made by automated machines in a factory somewhere that I am helping to keep employed), I'm actually doing my civic duty by contributing 57/100 of one cent toward paying the country out of insolvency. At that rate, I can have us paid down in about 3,582 millenia, give or take a couple of months.
Don't say I never did anything for you.
