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24 December 2015

Brother, Can You Spare a Penny, Or, Christmas is Coming,

the goose is getting fat.
Please put a penny in the old man's hat.
If you haven't got a penny, then a halfpenny will do.
If you haven't got a halfpenny, then God bless you!
If you haven't got a penny, maybe you can spare a dime? Or, even a nickel? What exactly is the "value" of a penny? Of a nickel? Of a dime?  Is the worth based on commerce, arithmetic or something else? Are we talking intrinsic or something more? Does "intrinsic" take into account the material and labor put into the piece or what someone would pay for it?

By now, Americans have heard the argument over and over again about how it costs twice as much to make a penny as the penny is "worth."  The argument surfaced again last month, which I read on NPR.org since regular customers of Books on First and regular readers of this blog know that Carolyn and Larry don't have television or smartphones and in any case, don't have time and inclination to watch or surf the 'net.  For those of you like us or who like us, I recommend instead reading Terry Pratchett's Making Money, which explains all of this to you in a more clear and a more entertaining way than I can.

I am of the crowd that a penny saved is a penny earned, and picking up a penny is lucky.  Once as a child, I asked my father to exchange 25 pennies for a quarter, because it would be easier for me to carry one coin instead of twenty-five of them.  He pointed out that if I lost the quarter, I would have lost the whole caboodle, but if I lost a penny, I would still have 24 cents!  That's a lesson in economics which I obviously never forgot.

I read of people throwing pennies into the garbage -- the penny's worth to them so little.  As I and the clerk at the Dollar Store say, "You can throw some of them pennies my way if you don't want them." 

Still, there is a lot of sentimentality associated with a penny.  For that reason, Federal Reserve Bank of Chicago economist Francois Velde's suggested eliminating the nickel and declaring the penny worth 5 cents, as the nickel costs around 8 cents to produce versus the penny's 2.4 cents.  What a brilliant concept!  And half of what makes it brilliant is how one's mind might wrap around the concept of a penny now being able to buy five times more and able to be made for half as much.
As much as I love pennies, I would also have to agree that the economics of pennies as they stand now is crazy and maybe, the Mint should simply stop making them and people need to start scrambling to pick pennies out of their pockets, their washing machine or their garbage.

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