With the news this year that the Canadian government is not going to be producing any more pennies and phasing out the ones that are currently in circulation, I have to ask why this is necessary?
The reasoning for not making them anymore is simple enough: It cost about 1.4 cents to make a 1 cent penny. I get that it isn't worth the effort. But they have been making pennies for more than one hundred years. Where did they all go?
"the U.S. still has an estimated 150 billion pennies in circulation."
Where did all the pennies from the last 100 plus years go? Why did we need to keep making new ones anyway? If the U.S. has 150 billion still in circulation, that means that there is approximately 450 pennies for every single citizen in the United States. I assume Canada has the same ratio. So, why do they need to make more anyway? Pennies aren't made of paper, they don't degrade. I have seen pennies from 50 years ago. They might have lost some tarnish, but they are still fully intact.
To me, the issue was not that it cost more to make a penny than they are currently worth. The issue was why they kept making pennies when they were already enough of them out there to last forever?
If the argument is that you shouldn't make something of value if it costs more to make it than it is worth when you are done making it, then how do you justify the $100 bill? I don't think it costs $100 to produce that.
Another argument is that so many people don't use cash at all anymore, or very rarely, because of the rise in debit card and credit card use. That is true. Again, that is another reason to stop producing them. There are more than enough out there to fill the need.
There is an argument that because the components that are in a penny can be melted down and be worth more than a penny that it makes sense to take them out of circulation. However, that could already happen anyway, and it isn't. That has nothing to do with making more or phasing them out. If all the pennies were just left out there, I am pretty certain they would last for the rest of time and they would never have to produce any more. The real issue was why they were ever taking them out of circulation and kept producing so many all these years when it was never necessary?
I still don't have any answer to that, except that the government was involved, and we all know how that goes.
"Earlier this month, President Obama endorsed the idea of killing the penny during one of his Fireside Hangouts.
The White House estimated that the move could save $100 million over a
decade. That may be a conservative estimate, considering it costs more
than $58 million to mint the coins last year, according to NBC News."
Yes, stop making them. There is no need to keep making them. No, don't take them out of circulation. They have always worked just fine and they always will.