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Why we should not abolish the penny

dylancatlow
Posts: 12,251
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5/19/2015 1:49:53 AM
Posted: 1 year ago
The main argument one hears in favor of abolishing the penny goes something like this: pennies cost more to produce than they're worth, therefore we should stop producing them.

The argument appears to be reasonable after first reading it, but I have yet to come across any detailed explanation of why it is actually bad that pennies cost more to produce than they're worth, and I don't see any reason why it should be the case. The government mints money in order to facilitate trade, not to make a profit. The government's job in minting money is not to introduce new wealth, but to allow people to easily exchange wealth that already exists (and large bills do not always get the job done) The government should be losing money be minting currency (after all, it takes a lot of time and effort to produce currency) - it's just a matter of how much we're willing to spend in order represent our wealth with currency. Pennies are an inefficient way of doing this compared to, say, dollars, but that doesn't mean't they don't have their place, in the same way that a flare gun is an inefficient way to communicate but still has its place in certain circumstances (e.g., emergencies). Yes, pennies are an inefficient way of representing wealth, but the fact that they cost more to produce than they're worth is not itself relevant, just as it's not relevant that 100 dollar bills cost only 12.5 cents to make and therefore costs less to produce than they're worth. In other words, if pennies cost 9/10ths of a cent to produce instead of the 1.8 cents they cost now, they would still be an enormously inefficient way to store wealth - they would just be proportionality less inefficient.

The real reason not to abolish the penny is that pennies perform an important economic function: they allow prices to end in .99. The prices of many products end in .99 even though the true value of those products may differ by as much as 50 cents. The reason for this is that prices ending in 9's are apparently so attractive to consumers that companies are willing to adjust their prices around that fact. Prices ending in .95 are simply not as good as prices ending in .99, otherwise companies would offer such prices more frequently. If prices ending in .99 induce consumers to spend just one percent more than they would spend if prices ended in .95, it would almost certainly be worth keeping the penny, considering the fact that the government only spends 50 million dollars a year making it. Since my spending is your income, and your spending is my income, promoting trade is essential to maintaining a good economy. To put it in perspective, the existence of the penny only has to increase the U.S. GDP by 1/300,000th in order to be economically beneficial. By one estimate, abolishing the penny would cost consumers 600 million dollars a year annually.

http://www.pennies.org...
ShabShoral
Posts: 3,236
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5/19/2015 2:07:56 AM
Posted: 1 year ago
p.1: Fiat currency should be abolished
p.2: The penny is fiat currency
c.1: The penny should be abolished
"This site is trash as a debate site. It's club penguin for dysfunctional adults."

~ Skepsikyma <3

"Your idea of good writing is like Spinoza mixed with Heidegger."

~ Dylly Dylly Cat Cat

"You seem to aspire to be a cross between a Jewish hipster, an old school WASP aristocrat, and a political iconoclast"

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ShabShoral
Posts: 3,236
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5/19/2015 2:07:56 AM
Posted: 1 year ago
p.1: Fiat currency should be abolished
p.2: The penny is fiat currency
c.1: The penny should be abolished
"This site is trash as a debate site. It's club penguin for dysfunctional adults."

~ Skepsikyma <3

"Your idea of good writing is like Spinoza mixed with Heidegger."

~ Dylly Dylly Cat Cat

"You seem to aspire to be a cross between a Jewish hipster, an old school WASP aristocrat, and a political iconoclast"

~ Thett the Mighty

"fvck omg ur face"

~ Liz
ShabShoral
Posts: 3,236
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5/19/2015 2:07:56 AM
Posted: 1 year ago
p.1: Fiat currency should be abolished
p.2: The penny is fiat currency
c.1: The penny should be abolished
"This site is trash as a debate site. It's club penguin for dysfunctional adults."

~ Skepsikyma <3

"Your idea of good writing is like Spinoza mixed with Heidegger."

~ Dylly Dylly Cat Cat

"You seem to aspire to be a cross between a Jewish hipster, an old school WASP aristocrat, and a political iconoclast"

~ Thett the Mighty

"fvck omg ur face"

~ Liz
ShabShoral
Posts: 3,236
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5/19/2015 2:07:56 AM
Posted: 1 year ago
p.1: Fiat currency should be abolished
p.2: The penny is fiat currency
c.1: The penny should be abolished
"This site is trash as a debate site. It's club penguin for dysfunctional adults."

~ Skepsikyma <3

"Your idea of good writing is like Spinoza mixed with Heidegger."

~ Dylly Dylly Cat Cat

"You seem to aspire to be a cross between a Jewish hipster, an old school WASP aristocrat, and a political iconoclast"

~ Thett the Mighty

"fvck omg ur face"

~ Liz
dylancatlow
Posts: 12,251
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5/19/2015 2:10:13 AM
Posted: 1 year ago
At 5/19/2015 2:07:56 AM, ShabShoral wrote:
p.1: Fiat currency should be abolished
p.2: The penny is fiat currency
c.1: The penny should be abolished

Stop trying to inflate your post count (geddit?)
ShabShoral
Posts: 3,236
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5/19/2015 2:11:34 AM
Posted: 1 year ago
At 5/19/2015 2:10:13 AM, dylancatlow wrote:
At 5/19/2015 2:07:56 AM, ShabShoral wrote:
p.1: Fiat currency should be abolished
p.2: The penny is fiat currency
c.1: The penny should be abolished

Stop trying to inflate your post count (geddit?)

Go to hell
"This site is trash as a debate site. It's club penguin for dysfunctional adults."

~ Skepsikyma <3

"Your idea of good writing is like Spinoza mixed with Heidegger."

~ Dylly Dylly Cat Cat

"You seem to aspire to be a cross between a Jewish hipster, an old school WASP aristocrat, and a political iconoclast"

~ Thett the Mighty

"fvck omg ur face"

~ Liz
dylancatlow
Posts: 12,251
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5/19/2015 2:22:00 AM
Posted: 1 year ago
At 5/19/2015 2:11:34 AM, ShabShoral wrote:
At 5/19/2015 2:10:13 AM, dylancatlow wrote:
At 5/19/2015 2:07:56 AM, ShabShoral wrote:
p.1: Fiat currency should be abolished
p.2: The penny is fiat currency
c.1: The penny should be abolished

Stop trying to inflate your post count (geddit?)

Go to hell

lol.
ShabShoral
Posts: 3,236
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5/19/2015 2:23:07 AM
Posted: 1 year ago
At 5/19/2015 2:22:00 AM, dylancatlow wrote:
At 5/19/2015 2:11:34 AM, ShabShoral wrote:
At 5/19/2015 2:10:13 AM, dylancatlow wrote:
At 5/19/2015 2:07:56 AM, ShabShoral wrote:
p.1: Fiat currency should be abolished
p.2: The penny is fiat currency
c.1: The penny should be abolished

Stop trying to inflate your post count (geddit?)

Go to hell

lol.

ha
"This site is trash as a debate site. It's club penguin for dysfunctional adults."

~ Skepsikyma <3

"Your idea of good writing is like Spinoza mixed with Heidegger."

~ Dylly Dylly Cat Cat

"You seem to aspire to be a cross between a Jewish hipster, an old school WASP aristocrat, and a political iconoclast"

~ Thett the Mighty

"fvck omg ur face"

~ Liz
dylancatlow
Posts: 12,251
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5/19/2015 2:31:18 AM
Posted: 1 year ago
At 5/19/2015 2:23:07 AM, ShabShoral wrote:
At 5/19/2015 2:22:00 AM, dylancatlow wrote:
At 5/19/2015 2:11:34 AM, ShabShoral wrote:
At 5/19/2015 2:10:13 AM, dylancatlow wrote:
At 5/19/2015 2:07:56 AM, ShabShoral wrote:
p.1: Fiat currency should be abolished
p.2: The penny is fiat currency
c.1: The penny should be abolished

Stop trying to inflate your post count (geddit?)

Go to hell

lol.

ha

Did you guys know that occasionally bossy will randomly start counting, and sometimes reach as high as 1000? It's apparently his way of dealing with the stress of knowing that he's going to fail the SAT and lose all of his non-existent money in the foolish bets he made.
dylancatlow
Posts: 12,251
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5/19/2015 2:31:56 AM
Posted: 1 year ago
My steam chat after telling him:

Loozy2: im about to post that
Loozy2: lol
Shab Shoral: bitch
Loozy2: hahahaha
Shab Shoral: YOU BETTER CHECK YOURSELF
Shab Shoral: BEFORE YOU WIGGITY WRECK YOURSELF
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ShabShoral
Posts: 3,236
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5/19/2015 2:32:53 AM
Posted: 1 year ago
At 5/19/2015 2:31:18 AM, dylancatlow wrote:
At 5/19/2015 2:23:07 AM, ShabShoral wrote:
At 5/19/2015 2:22:00 AM, dylancatlow wrote:
At 5/19/2015 2:11:34 AM, ShabShoral wrote:
At 5/19/2015 2:10:13 AM, dylancatlow wrote:
At 5/19/2015 2:07:56 AM, ShabShoral wrote:
p.1: Fiat currency should be abolished
p.2: The penny is fiat currency
c.1: The penny should be abolished

Stop trying to inflate your post count (geddit?)

Go to hell

lol.

ha

Did you guys know that occasionally bossy will randomly start counting, and sometimes reach as high as 1000? It's apparently his way of dealing with the stress of knowing that he's going to fail the SAT and lose all of his non-existent money in the foolish bets he made.

If I lose, I'll pay you in worthless pennies, you son of a bitch.
"This site is trash as a debate site. It's club penguin for dysfunctional adults."

~ Skepsikyma <3

"Your idea of good writing is like Spinoza mixed with Heidegger."

~ Dylly Dylly Cat Cat

"You seem to aspire to be a cross between a Jewish hipster, an old school WASP aristocrat, and a political iconoclast"

~ Thett the Mighty

"fvck omg ur face"

~ Liz
ResponsiblyIrresponsible
Posts: 12,398
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5/19/2015 6:45:47 AM
Posted: 1 year ago
At 5/19/2015 2:07:56 AM, ShabShoral wrote:
p.1: Fiat currency should be abolished
p.2: The penny is fiat currency
c.1: The penny should be abolished

=/
~ResponsiblyIrresponsible

DDO's Economics Messiah
xus00HAY
Posts: 1,393
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5/19/2015 11:23:10 AM
Posted: 1 year ago
Well do tell! doooooooooooTELL!
Yes, rather than try to find a woman who belongs on a $20 lets put Oprah on a penny!
That will get people to get in the habit of rounding to the nearest 5.