Canada Kills The Penny, Ctd

Apr 2 2012 @ 6:01pm

Don't expect America to follow Canada's lead:

Dollar bill supporters — especially those who sell the paper to the government on which the bills are printed — will look at a successful penny elimination as a precursor to the elimination of the $1 greenback. Keeping the penny, therefore, will be part of their strategy to convince Americans that there should be no change in their change.

Eric Wen sticks up for the much-reviled coin:

2001 economic analysis by Penn State’s Raymond Lombra found that a post-penny economy—in which we round to the nearest nickel—would probably hurt the poor disproportionately. In theory, rounding would balance itself out over time—with some transactions rounding up and others rounding down. Lombra’s simulations, however, which were based on the price book of a major retail chain, found that between 60 and 93 percent of transactions would round up, costing consumers nearly $600 million a year. Because the poor tend to use cash more often, they would shoulder most of that burden.