NEW YORK, June 7, 2021 (Newswire.com) - "Find a penny, pick it up, all day long you'll have good luck." — a saying Gen Alpha will never understand the same way that Gen Zers don't know what a rotary phone is.
Soon, finding a penny on the sidewalk will be about as likely as getting struck by lightning twice. The U.S. Mint announced in early April that it will stop producing pennies beginning in 2022 and will make its last batch on April 1, 2023. Don't worry—it's not a Volkswagen-level April Fool's joke. This is the real deal. And it's arguably the biggest coin news since 1857 when Congress discontinued the half cent, which believe it or not, people weren't thrilled about at the time.
Whoop-de-do, what does it all mean, Basil?
The end of the penny as we know it
The coronavirus pandemic led to a nationwide coin shortage in 2020, which revived the debate about the penny's usefulness—or lack thereof.
The penny's purchasing power has significantly declined over the years because of inflation. Meanwhile, its production costs have gone up.
In the 2019 fiscal year, the U.S. Mint produced more than seven billion pennies at a loss of almost $70 million. It costs roughly 2 cents to manufacture a coin that's worth half that. It just doesn't make sense, ya know? At least that's my 2 cents. And I'm not alone.
"In high school, I started writing letters to my congressional reps about canceling the penny," said Sean O'Connor, head of strategy at Blocknative. "In 2008, it was obvious that they were a drag on economic activity. And in 2021—especially compared to the efficiency of fractionalized tokens on blockchain networks—I am shocked that we still have the penny."
Not everyone wants to see the penny go the way of the dodo, though. A lot of people are clinging to the copper coin for its sentimental value as one of the first coins produced by the U.S. Mint following its creation in 1792.
Other pro-penny people say that getting rid of the penny could lead to a 1-cent sales tax being implemented on consumers because of the high number of prices ending in 99 cents. But maybe those prices will be on the way out too?
Dollars and sense: The penny's impact on national debt
Coin collectors and those interested in reducing the national debt both likely will be excited about the penny's demise. The last batch of pennies will be limited to 50,000 proof sets and will be auctioned off to coin collectors. Bidding on the proof sets is expected to start at $179.99 and proceeds will go toward the national debt, which is at $28 trillion and counting. So that's not going to put much of a dent in the gross national debt, but every bit helps.
If you—like our country and many people in it—are struggling with debt, there are ways to combat the problem. As of March 2021, the total outstanding revolving consumer credit debt was more than $980 billion, according to the Federal Reserve. So, you're in good company. You could look into how to consolidate your credit card debt, which can help you reduce your interest rate and streamline your debt into a single monthly payment. After all, every penny counts (for now).