Akst: Whaddya zinc? Let's kill the penny

A copper U.S. penny, dated 1960

A copper U.S. penny, dated 1960 (Credit: istock)

Daniel Akst

Portrait of Newsday editorial board member Daniel Akst Daniel Akst

Daniel Akst is a member of the Newsday editorial board.

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O Canada, how did such a great big loonie zone ever get so sensible?

The loonie, of course, is the nickname of the Canadian dollar -- which is pretty strong, by the by. Just like the Canadian banking system, unlike some others I prefer not to name.

It turns out that bilingualism is a pretty good thing as well, making people smarter and more resistant to dementia. Many Canadians speak both English and French, admittedly with weird accents, and perhaps this is one source of the mysterious northern advantage. Don't even get me started on the Canadian health system, which is better and cheaper than ours. (Then again, so is nearly everyone else's.)


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The latest crushing advance for the juggernaut of rationality next door is the abolition of pennies. That's right, Canada is simply doing away with them this fall, saving the government 11 million loonies -- that's about 11 million smackers, American -- each year.

Nobody's measured the mental health benefit to average Canadians, but I'll wager it's big. Pennies, like most coins, are a pain in the neck, only more so because they're worthless. Canada thus joins a growing list of no-nonsense nations that have abolished the one-cent coin, including Australia, New Zealand and Norway.

The Canadians noticed that their penny -- made largely of steel -- was costing them 1.6 cents to produce, which of course was ridiculous. Not to mention that it's only worth 5 percent of its value in 1858, when it was introduced. In other words, it won't buy a darned thing, so why bother?

Here in the United States, the penny also costs more than a penny to produce, but we do everything in a big way. Coinupdate.com, a website for collectors, figures it costs us 2.4 cents to make each one. (Maybe we can save a few bucks by getting the Canadians to make them for us.)

Countries are supposed to enjoy a little windfall from issuing currency; the difference between the cost of producing a coin or bill and the face value is known as "seignorage." But in this case, Uncle Sam gets negative seignorage. In economics, the term for this is "insane."

But eliminating the penny just isn't the American way. For any Canadians who might be reading this and somehow haven't had their fill of schadenfreude in connection with us, American pennies are made largely of zinc. And in this country we have the zinc lobby.

But in fairness, getting rid of the penny might make us more dependent on the nickel (mostly copper), which could be disastrous. Producing a nickel costs the government (are you ready for this?) more than 11 cents. And we wonder why Washington can't cut spending. It's like the old joke: They lose a little on each one but make it up in the volume. So the nickel should go, too, although I'll admit it will make tipping a lot harder for me.

If you're worried you'll somehow get gouged absent America's most insignificant coin, direct your eyes once again northward. The Canadians are about to solve all this neatly.

Cash transactions will be rounded to the nearest 5 cents, but everything else (credit card purchases etc.) will be calculated down to the cent, just as it always was. People will be allowed to keep using pennies if they want -- that Canadian tolerance again! -- even though the government would prefer that folks turn them in for scrap, at which point they will no doubt be melted down in some environmentally correct manner and made into peace-keeping helmets.

And so this is what we've comes to: the richest country in the world, eying a penniless neighbor with envy.

Daniel Akst is a member of the Newsday editorial board.

This is a corrected version of the column. An earlier version incorrectly included Britain on a list of countries that had eliminated the penny. It eliminated the half-penny instead.