According to an old superstition, it’s good luck to find a coin on the road side. But whether or not you believe picking up that coin will bring you luck, one thing it definitely won’t bring you is wealth. coins are worth so little now that they can hardly purchase anytime.

coins are so close to worthless that many people argue it’s time to do away with them altogether.

However, while many people are calling for the coins retirement, others are working just as passionately to keep the coin in circulation.

Each side in this debate refers to the other side’s arguments as “myths” and offers up “facts” to counter them, making it hard to determine just where the real facts lie. Here’s a summary of the arguments on each side, along with the evidence for and against them.

Reasons to Retire the Penny

The arguments for halting production of coins basically boil down to the fact that “they’re more trouble than they’re worth.” Coins today are worth almost nothing, but they still cost money to produce and consume vast quantities of natural resources.

To anti-penny activists, that’s a lot of costs for a coin that can’t even buy a chewing gum anymore.

1. They’re Useless]
Coins are simply no longer useful as a means of exchange.

“There are precedents for getting rid of coins that are too small to use. Back in 1857, the U.S. Mint stopped producing halfpenny coins – which, according to the historical information calculator at MeasuringWorth.com, had a purchasing power of $0.14 in 2015 dollars. So at the time it was eliminated, the “useless” halfpenny could buy as much as 14 pennies can today. If consumers in 1857 could get along without halfpennies, then modern consumers can almost certainly manage without a coin that’s worth less than one-tenth as
much.”

2. They Waste Time
As useless as coins are, most of us can’t avoid them. Often, when we pay with cash at a discount store, the total amount
doesn’t end in a round figure – so we end up paying the exact amount.

This not only weighs down our pockets, it also holds up the line while we mess around counting the coins discount.

4. They Cost the Government Money
Anti-coin advocates are fond of pointing out that coins now cost more to produce than they’re actually worth.

According to the 2014 Annual Report from the U.S. Mint, it now costs about $0.017 – or 1.7cents – to make one cent. That means whenever the Mint produces a penny and sends it out to a bank, it’s actually losing money on the deal.

The Mint has researched the possibility of making pennies from cheaper materials, but it found that there’s no way to bring the
cost of producing them below their face value.

In theory, a single coin could be used for hundreds, thousands, or even millions of transactions before it drops out of circulation. However, this only works if the coins actually do circulate – and coins, as noted above, often don’t. They’re so hard to use that they end up stuffed in jars or abandoned.

As a result, the Mint just has to keep making more coins at a loss.

Reasons to Keep the Coins

Some of the arguments for keeping the coin are practical ones. For instance, coin supporters claim that eliminating the coin could harm the economy or hamper charities in their fund-raising efforts.

However, other arguments are sentimental, having to do with the way people feel about the coin – and these arguments, because
they’re not based on logic, are much harder to counter.

1. They Keep Prices Low
Coin supporters point out that that if coins are eliminated, all cash transactions will have to be rounded up.

However, low-income earners – who, as study shows, are more likely than other consumers to pay for their purchases with cash – would be hit especially hard.

According to a 1990 study in the U.S by
economist Raymond Lombra, who testified before the Senate Banking Committee that his “careful statistical analysis” of prices showed that rounding cash sales up or down would cost consumers more than $600,000 a year. Lombra also argued that this small change in prices would trigger an increase in the Consumer Price Index (CPI) and, consequently, in all government payments tied to the CPI, such as Social Security.

However, a newer study by economist Robert Whaples, published by the Eastern Economic Journal in 2007, contradicts Lombra’s findings. Unlike Lombra, who simply looked at a convenience store’s prices and assumed that each consumer would buy three items in one visit, Whaples analyzed actual data from more than 200,000 convenience-store transactions in seven states. He concluded that once taxes and fees were factored in, consumers would actually come out slightly ahead on average with prices rounded off. However, he also stresses that even if prices did increase, the difference would be so tiny it couldn’t possibly affect the CPI, and thus it could not trigger widespread inflation.

Another piece of evidence against Lombra’s claims comes from Canada, which stopped minting its penny in 2013. Prices there are now rounded up or down to the nearest $0.05 for cash transactions, while payments made with credit, debit, or old-fashioned checks are still settled down to the cent. Since the changeover, according to Trading Economics, the inflation rate in Canada has wavered slightly up and down but has remained well below its historical average of 3.2%. In Canada, eliminating the coin has not led to a widespread increase in prices.

2. Charities Rely on Them
Pro-penny groups argue that even if coins seem worthless, they actually add up to hundreds of millions of dollars in charitable donations each year. Some charities raise funds through “coin drives,” encouraging people to donate their unwanted coins for important causes. The very fact that coins have so little value makes them useful to charities, because people are happy to give them away.

4. Some Persons Like Them
Despite all the arguments for retiring the coin, some persons are in favor of keeping it. A 2014 poll by Americans for Common Cents found even stronger numbers in favor of coins, saying 68% of adults want the coin to stay in circulation – although the fact that the poll was conducted by a pro-penny group suggests that the questions might be somewhat biased
toward the pro-penny side.

What’s less clear is why some persons are so committed to a coin with so little monetary value. Some persons are “attached emotionally” to the coin because it brings back happy childhood memories of saving coins in piggy banks.

This is the least substantive argument in favor of keeping the coin, and yet, ironically, it’s probably the most effective. So long as most people remain attached to the coin – whether their reasons
are logical or not.

Finally
It’s possible that what happens to the coin could end up depending not on the law, but on decisions made by businesses. If more
businesses follow example and start rounding down their bills, their customers will find themselves with fewer coins in their pockets.

What do you think? Should the coin remain legal tender, or should it be scrapped?

Thanks for reading. Please share.

source: http://www.cashrange.com/should-we-get-rid-of-the-coin-reasons-to-keep-it-vs-reasons-to-eliminate-it/