Tuesday, February 19, 2013

Would Getting Rid of the U.S. Penny Cause Inflation? Three Reasons to Think it Would Not

Can we get along without the U.S. penny? Reportedly, a majority of Americans think we cannot. We’re just used to it. After all, the penny has been around in one form or another ever since George Washington signed An Act to Provide for a Copper Coinage in 1792.

What we have not always had is a coin as small in value as the current U.S. cent. In fact, we never have had a coin worth so little. Take a guess at how much a penny was worth, in today’s money, in the year you were born. Then check your answer against the following chart, which shows just how much that little sliver of copper and zinc has shrunk in value over time:



Look at it this way:
  • If we got rid of the penny, our smallest coin would be the nickel. That would take us back to where we were in 1973.
  • If we got rid of the penny and the nickel, our smallest coin would be the dime. That would take us back to 1947.
  • If we got rid of the penny, the nickel, and the dime, our smallest coin would be the quarter. That would take us back approximately to where we were from 1857, when the last half-penny was minted, up to the First World War.
But would getting rid of the penny cause inflation? Read more >>>

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