What do you do with your pennies other than allowing them to accumulate in a jar? U.S. Money Reserve president, Phillip Diehl says the penny has become more of an expense than a benefit to the economy. In an interview the US Money Reserve President calls the penny obsolete, and points out just how useless the coin has become.
“If you were to pick up a discarded penny off the street, it would cost you more in labor than the actual value,” says Diehl. Yet, economists cry foul and say eliminating the penny could force inflation. Both sides of this argument have been tossed around for the last three decades, but surprisingly, today, less than 25 percent of transactions are cash, so how often are pennies really being used. U.S. Money Reserve doesn’t believe anyone would feel any effect from the demise of the penny.
The basic arguments are quite simple: the penny, which was put into service for the first time in the United States in 1793, has lost its initial value. It costs a little more than $2.00 to make that shiny one cent coin, which translates into a $15 billion dollar expenditure, that isn’t even re-introduced into the economy. When you consider the cost to produce, to transport, to circulate, and store at the U.S. Mint, you see the manufacturing becomes a beautiful waste of public funds. As far as consumers are concerned, some fear vendors would probably take the opportunity to increase prices and the transaction would cost them more, but other countries like Sweden, and Canada simply use a rounding system for cash transactions. For example, $9.99 would round up to $10.00, and $9.92 would round down to $9.90. According to experiences elsewhere, vendors rounding up prices are unfounded.
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