Once in a while, I find a Canadian penny among my stash of brown Abraham Lincoln heads. Possibly some Canadian visitor on vacation forgets to empty his or her loose change before going to Disneyland. It’s easy to confuse the two pennies. The Canadian penny is the same size and color as ours.
Just like our penny, Canada’s also costs more than its worth. It costs the Canadian government 1.6 cents to produce one penny. It’s even crazier here in the States, as it costs 2.4 cents per.
But the Canadians seem to have more sense than us. Canada will withdraw its penny from circulation this year, saving taxpayers $11M annually. There have been efforts to eliminate the penny in the U.S. in the past, but Congress has always been resistant (as are zinc miners and businesses with stakes in vending machines).
When will we wake up? Tim Fernholz has a good take our penny problem.
The penny paradox is a dilemma at the heart of democratic government–an engaged, concentrated group of people who benefit from spending can keep it going, even of it’s not in the broad public interest.
What’s even crazier is that the nickel costs 11.2 cents to make. Obama’s budget for 2013 included a proposal to allow the US Mint to study the use of alternative metals in coin production in the hope that this would reduce costs. Too bad Congress will kill this part of the proposal once again.