Penny Foolish

The US. Mint recently released a disheartening statistic: In 2013, the cost of making a penny exceeded its face value for the eighth year in a row. It now costs 1.83 cents, or about 2 cents, to make 1 cent.

Does this make sense? A newborn can tell you it doesn’t. (By the way, the story with the nickel is as bad but let’s stick with the penny for now. Besides, one step, or rather one cent, at a time!)

At a mass of 2.5 grams, the penny comprises 2.5% copper and 97.5% zinc. The total loss incurred by the penny in 2013 amounted to $55 million. A simple math (5,500,000,000/0.83) shows that the US Mint shipped about 6.63 billion pennies (over half a billion per month!) in the 2013 fiscal year.

Abolish_The_Penny!

Fifty-five million dollars, coming at the taxpayers’ expense, is small change for the government and for billionaires but it is more than a quarter of the annual budget of many community colleges.

So what explains the madness?

Political apathy, combined with the public’s supposedly sentimental attachment to the coin bearing the visage of our beloved President Lincoln. (The 16^th President will continue to grace the $5 bill, so he will not disappear from our wallets and transactions anytime soon.)

What is often overlooked is that psychology and math also play a role in perpetuating the penny. As Alex Bellos, author of The Grapes of Math: How Life Reflects Numbers and Numbers Reflect Life, points out: “The practice of subtracting 1 from a round number conveys a potent message. When we read a number, we are more influenced by the leftmost digit than we are by the rightmost, since that is the order we read, and process, them. The number 799 feels significantly less than 800 because we see the former as 7-something and the latter as 8-something whereas 798 feels pretty much like 799. Since the nineteenth century, shopkeepers have taken advantage of this trick by choosing prices ending in a 9, to give the impression that a product is cheaper than it is. Surveys show that anything between a third and two-thirds of all retail prices now end in a 9.Though we are all seasoned shoppers, we are still fooled …”

But to pay for merchandise or food items or gas or anything that ends in a 9 requires, of course, that one or more pennies change hands, causing endless delays at counters and cash registers and billions of dollars in lost time and productivity.

What to do?

We must, with a will, overcome the perverse pull of psychology and send the penny to the dustbin of history. Make the last digit of the price of any item a 5 or a 0. (If the nickel is also consigned to oblivion, 0 and 5 will still be the only acceptable last digits to accommodate the quarter.)

One immediate benefit will be the rise in the aptitude for math among the public: counting and calculating in multiples of 5 will become second nature to most, since any digit that ends in a 5 or a 0 is divisible by 5. No need to count pennies anymore. Among some, this may even stir their latent fascination with the magic and mystery of numbers.

Ramanujan, anyone?

Still not convinced? Then you really need to watch this video.

President Obama recently included an intriguing provision to his 2015 budget to develop “alternative options for the penny and the nickel.” Since he hasn’t spelled out what exactly he means, and given the current state of a dysfunctional Washington, the penny may continue to live while choking the life out of our collective common sense.

Canada, our neighbor to the north, has badly beaten us to the punch and abolished the penny in early 2013. How can we allow the most advanced nation on earth become the laughingstock of the rest of the world, for sheer stupidity, no less?

We, the people, must refuse to “live lives of quiet desperation,” rise boldly against this dumb and cruel affront to our common sense, and bury the penny for good.

RIP, penny!