President of the U.S. Money Reserve spoke out recently about the possibility of removing the penny from circulation. Killing the penny could save taxpayers millions each year. Are we ready for all the consequences that would happen if we remove coins from circulation? US Money Reserve President Phillip Diehl believes that creating pennies costs more than having pennies are worth. He also states that nickles are no longer worth producing either. Nickles cost 4 cents more than they are worth. Is it time to kill the penny production?
According to the article, charities would suffer drastically. Most people donating to charities are donating by means of a coin. When you see a charity standing in front of the local Walmart, you reach in your pocket for your coin change to drop in the bucket. Pennies and nickels make up a large amount of the contributions charities collect. How would a charity collect if plastic was the only “currency” around? Plastic users will need things like credit card machines or card sliders to accept funds. Without sliders or credit card machines, charities will suffer donations.
Rounding off to the nearest dollar is another option being considered. This means if a can of soda originally cost $1.25, and the coin part was tossed, then the soda cost would either increase to $2 or it would only cost $1.00. This concept is good if the price goes down. If the price increases by a dollar, then consumers would be suffering the consequences of killing the penny.
Mark Weller, comments that he has no reason to think that the general business will decrease its cost. He believes that most of the smaller stores will increase to the next dollar instead of decrease to lower. The economists believe that removing coins from circulation could cause local small businesses to have issues staying afloat unless they raise prices.
According to Jarden Zinc productions, in 2010, the United States ask for solutions to cheaper penny production. Now in 2015, the U.S. Is no closer to coming up with the solution. Diehl believes that the nickel is savable but the penny has little to no hope of holding on. Hopefully, the coin will remain in circulation so that charities and poor individuals can still have a chance to succeed.