Has anyone been to the US recently? If you have, a few things might have struck you.
The biggest thing would probably be how ridiculously cheap it is to get over to the US and to travel around, relative to around a decade ago.
I want to take a look at something a little closer – the US penny, to be exact. On your travels, you would have noticed these tiny blighters clogging up your wallet space with seemingly no way to get rid of them. Fancy paying for $US20 worth of goods with pennies? That’ll be 2000 pennies weighing a total of 907 kilograms.
Going back to when men still grew serious beards, pennies still had a use. They could actually purchase goods – for example, a packet of Hershey’s chocolate. Also, you need a small unit of currency so that you don’t overpay. Take purchasing a coffee – if the smallest unit of currency was a $US5 note, you’d overpay by around $US2. That’s why smaller units of currency exist.
So, do pennies still have a use? NO! Inflation has made the penny almost worthless. Absurdly, the US mint still manufactures pennies even though they cost 1.08 cents to produce! The mint pays more for their production than the penny is worth in circulation! Adding to this – you can’t get rid of them! Vending machines, Laundromats won’t accept them. Additionally, the US doesn’t include sales tax in displayed prices (unlike more enlightened countries) so unless you can multiply by 8.875% in your head, you’re going to spend precious minutes fiddling around with tiny bits of metal, wasting your time and the increasingly irritated customers behind you in the queue.
Pennies are a deadweight loss on every cash transaction in the economy and need to go the same way as the one cent coin in Australia, the UK and Canada. We got rid of them and besides a few fans of the feathertail glider, no one cried.