Please note! This essay has been submitted by a student.
To begin with, the historical precedents of the United States and other countries have shown that the retirement of the penny production is monetarily appropriate and can produce positive results. Many industrialized countries including France, the Netherlands, Spain, United Kingdom, Australia, and New Zealand previously retired their penny production for reasons that parallel the current situation with the US penny such as “manufacturing cost exceeded their face value and because of their low purchasing power,” (Gadsby 5). These countries have taken the route to discard the penny in the late 1900s instead of holding onto them after realizing its financial drawbacks and it has succeeded without major concerning impact over the years. However, the American’s popular sentiment and the decision to preserve the tradition of the ubiquitous one cent penny impede the country’s ability. Even among the industrialized nations that ceased their production of their lowest denomination coin, it is especially notable that the neighboring country of the United States—Canada— has also joined the growing list in 2012 and entirely ended the distribution within one year, calculating to cut back $11 million every year (Klein and Hoagland 21). The success Canada has experienced will be greater in the United States is one of the countries with the largest economy and the production of the penny is also There are always viable logic into why so many countries has chosen to eliminate the penny production Canada has also followed the reform of the penny many other countries had adopted due to essentially the common momentary consequences the penny has rendered.
One of the argument of the proponents of the Currency Optimization, Innovation, and National Savings (COINS) Act of 2017—a legislation that reintroduced the idea to eliminate the penny production for a timeframe of a decade among other financial propositions— quotes, “The U.S. Mint discontinued the halfpenny in 1857, due to its lack of significant monetary value at the time. Yet adjusted for inflation, the halfpenny then would be worth about 14 cents today,” (GovTrack). The US decided to discontinue the halfpenny more than a century ago after acknowledging its impractical value, yet despite the penny’s evident negative seigniorage and its inability to profit or facilitate exchange, the penny continues to be produced. Within the application of the principle that determined the elimination of the halfpenny, the current nickel, dime and especially the penny has small enough value that would have been regarded as more expendable than the halfpenny in the 1857. Not to mention, with further inflation, the purchasing power of the penny will continue to drop and therefore remain economically unsustainable and valueless. The history of the United States itself is a convincing model that the United States is capable of modernizing its coin currency for the overall positive economic outcome.