Saturday, March 31, 2012

Getting Rid of the Penny Part 2

In 2008 I posted about the Canadian federal government wanting to get rid of the penny which you can read here.  Well, in the budget handed down by the Canadian federal government recently, one of the things they said they want to do is that they are getting rid of the penny.  By the end of the year, the penny will be taken out of circulation.  Back in 2008, it was rumored that was happening.  It looks like it finally happening.  Also back in 2008, it was said that the penny is losing value.  Is that still the case?

It take 1.5 cents to produce a penny.  But for some odd reason, the higher the coin amount, the cheaper it is to produce it.  You would think it's the other way around, but it's not.  In terms of saving money for the government, it makes sense to take the penny out of circulation.  In a 2010 article by CBC Business, it talks about various countries pennies and they get by without it.  Then senator Irvin Gerstein said it costs to keep the penny, but it would also costs to eliminate it.
“By some estimates, the production and use of the penny represents hundreds of millions of dollars every year in direct costs to taxpayers and lost productivity," Senator Irving Gerstein said in a statement, adding "there would be costs associated with eliminating the penny, as well.”
Back in 2007, 62 percent of businesses were in favour of getting rid of the penny.  That means they will have to round to the nearest nickel.  Australia and New Zealand have had no issues in doing so and they haven't had a penny since the 90s.  But will this work for Canada?  Apparently it will.

The Senate has recommended to get rid of the penny. Which is what they will do at the end of the year.  According a 2010 article by Maclean's, the penny has been called outdated and since it's inception, it's been seen as worthless and flimsy compared to the sterling that was issued for years prior to the penny's 1858 debut.

I'm on the fence about the penny.  I don't neither like it or hate it.  I heard a person say one time that it's useful.  But like it's been said, it's no longer useful.  If the penny was never useful, than why couldn't they have killed it and continued using the previous currency?  That would seem like the most logical thing to do.  But for the people who hate the penny, I guess they can rejoice in some roundabout way.  The penny is on it's way out and I guess we will use it while we can.  How do you feel about it.  Like I said, I'm on the fence ala I'm indifferent.

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