The New Yorker's David Owen has done a service to his country by penning a piece in this week's Money Issue called 'Penny Dreadful.' What would happen, Owen asks, if we simply got rid of pennies? Nothing too terrible, apparently:
Even if retailers consistently fudged in their own favor, rounding’s impact on individual consumers today would be imperceptible. For one thing, rounding would apply only to the final five cents, no matter how high the price: a $1.98 purchase would be rounded up two cents; so would a $1001.98 purchase. Americans have taken this sort of thing in stride for years. Sales taxes are rounded when assessing them results in fractional cents, and most consumers don’t even try very hard to avoid A.T.M. fees, which are far more costly than any form of rounding. Besides, the growing percentage of transactions that are handled by credit card, PayPal, and other non-cash media wouldn’t be subject to rounding at all.
In this same vein, everyone should go back and read William Safire's brilliant 2004 op-ed on the same subject. Titled 'Abolish the Penny,' the piece also has this amusing graf:
But when the penny is abolished, the nickel will boom. And what is a nickel made of? No, not the metallic element nickel; our 5-cent coin is mainly composed of copper. And where is most of America's copper mined? Arizona. If Senator John McCain would get off President Bush's back long enough to serve the economic interests of his Arizona constituents, we'd get some long-overdue coin reform.
Yes, when will McCain get off Bush's back? Anyway, Safire is right, and so is Owen. The penny is useless, and it's time to get rid of it. Perhaps McCain can even take up the issue (okay, that's wishful thinking).