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Pennies for the Poor
Posted by Raven on July 19th, 2006
I thought I had heard it ALL.
The U.S. Mint is a money-making government operation in more ways than one. In 2005, it made $730 million in profit. But pennies are being targeted as the big loser for the mint. It costs the government 1.4 cents for every penny produced. Multiply that by 7 or 8 billion pennies made each year and it comes to a $20 million loss.
This makes sense. Or is it cents. Whatever, I can understand this justification for ending the production of pennies.
“I cannot support eliminating the penny at this time,” said Rep. Carolyn Maloney, D-N.Y. …Maloney added that eliminating the penny would hurt the poor.
“A study by a former Federal Reserve economist shows that rounding hurts lower income most and this effect would be especially strong if only cash transactions are rounded,” she said.
This is the dumbest justification I’ve heard to date about the poor. Wow.
July 20th, 2006 at 3:37 am
It seems to me in an economy that measures to a tenth
of a cent(gasoline)and to a thousandth of a cent (electricity) as a means to mislead folks on value, as well as any system that uses any taxation system based on per cent, it might be useful to have a “one hundredth” unit in circulation. The whole fractional rounding thing iis ALWAYS a means for the nice folks
who do it to edge more out of something than it’s worth. Ask your banker, at the rate of 3.45% per annum.
July 20th, 2006 at 7:49 am
Yeah, I thought I’d heard it all too. I don’t understand Rep. Maloney’s contention that cutting out pennies would hurt the poor. In what way would that be? I don’t get it.
July 20th, 2006 at 3:11 pm
I just don’t get it. Why waste money producing money?
LOL. DO away with the penny and we’ll see how much pooer the poor get.
Sheesh.
July 21st, 2006 at 7:41 am
For once, I have to agree here – that really is a rediculous justification :> How many cash transactions does a typical person make per day? Perhaps two or three, if they have no credit/debit card. If every one of those is rounded up to the nearest penny… they lose a whole 21c a week. Negligable, even to the minimum-wagers. And even that assumes all transactions are rounded up, when some would be rounded to the nearest cent.