Monday, February 4, 2013

A Penny Lost

It is the last day of the penny in routine commerce in Canada. The mint already stopped minting pennies last year, and starting tomorrow, banks and stores will no longer be able to get pennies. Starting today, the government is encouraging merchants to round cash transactions to the nearest nickel. There are calls for the United States, whose currency is set up the same way, to do the same thing before too long.

Mathematically, the loss of the penny is a mess. All this new rounding is more extra work than carrying pennies around was, but that is a burden primarily for the private sector. So is the burden of keeping track of the transactional slop of cash transactions that are off by up to 2 cents. The government is saved the cost of minting pennies, though, and in a time of austerity budgets, that is the most important thing.

And besides, people really are burdened by pennies. The extra financial information they provide isn’t worth the space they take up. In a jar of coins, pennies outnumber all other coins and distract attention from the only coins that actually count for anything, the quarters. So will nickels and dimes be the next to go? The arguments against pennies also work for nickels and dimes, so my guess is that it is just a matter of time before they go too.