Jeff Gore has suggested to scrap the 1 cent coins a few years ago. Why doesn't the US cancel the pennies? Is it really that bad as ?

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    $\begingroup$ That bad as...? $\endgroup$ – Giskard Oct 9 '18 at 17:55
  • $\begingroup$ Yes we should. Greg Mankiw also has some thoughts on this. Worth looking up. $\endgroup$ – BB King Oct 9 '18 at 20:44

Should we get rid of the Penny?

No. That would be as foolish as suppressing a symptom instead of addressing the illness.

The reason why "a penny does not buy a penny" --or being more accurate, why it no longer buys a penny-- is that currency depreciation has been policymakers' answer for too long and for too many issues.

The permanent, excessive printing of money inevitably weakens the purchase power of the USD. Metal prices, like everything else, go up where economic problems are "addressed" by issuing more bonds, giving more subsidies, ignoring the rapidly changing demographics, and pretending that welfare state still is sustainable.

The weakening of a currency by inflationary measures is not limited to rendering coin metals out of reach. At some point, even the cost of paper on which money is printed can also exceed the purchase power of the denominations printed on that paper. History has many examples of this.


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