The Daily Plunge

I’m a big believer in change, because it’s so convenient. But what happens when certain someones get their way and the penny goes the way of the 8-track? Think of the children! Pint-sized budding gamblers will no longer ante with a penny, but will instead be forced to ante with a nickel, effectively raising the ante five-fold.
For a child, especially one who is interested in gambling, the stakes will have been raised beyond what their weekly allowance can bear. I suppose parents could raise their children’s wages to compensate for the increased cost of a friendly Poker game, but as the allowance bill rises, so does the overall cost of maintaining a household. This is very bad for the working class.

This is only one of many nightmare scenarios that will play out should the penny be abolished from America’s monetary system.

Way back in my university days I visited a friend of mine in Austin who was “attending” the University of Texas. I place “attending” in quotation marks because each time I made the trek to Austin, beer bottles, both full and empty, outnumbered books by about 100 to 1. In fact, I’m not sure I ever saw anything there that resembled what could be described as a text book.

Anyway, by the time these visits began to wind down and it was time for me to go back home, we would invariably scrounge for cash to provide the final day’s sustenance. Lo and behold, during one of our usual scrounges I came across a gigantic jar filled with pennies; thousands of pennies. Thus a years-long penny collection revealed the answer to our money-for-food quagmire.

I’m not sure the Domino’s delivery guy appreciated the 1,500 or so pennies that greeted him at the door as we exchanged legal tender for pizza, but the penny saved the day. So, while it may be true that I’m partial to the penny for reasons of nostalgia, it has the greater effect of keeping runaway inflation in check.

Pennies allow the cost of goods to be subdivided down to the hundreds place. The loss of the penny will put an end to this subdivision, and the cost of goods will naturally be rounded up to the next nickel, or even the next dime.

So, for instance, my favorite one-piece bubble gum, Super Bubble Gum (which is also available in the delicious green apple and grape flavors) will rise from about 7 cents apiece to 10 cents apiece. Other goods and services will follow this trend line, and all the money we thought we had saved by eliminating the penny will be dwarfed by the resulting rounded-up inflation.

In some manufacturing processes, margins are reckoned as literally pennies on the dollar. What happens when those pennies disappear, and they’re reckoned as nickels, or dimes on the dollar? That’s right. The cost of those goods to the consumer rises substantially, particularly given that these manufacturers are producing millions and billions of widgets for the consumer.
It’s simple economics.