EDITORIAL: Pennies from heaven? Not quite

Nothing could be more fashionable in government today than penny-pinching. Yet the persistence of the penny - to say nothing of all the valuable metals in nickels - speaks volumes about why it's so hard for government to do the right thing.

In reason's latest assault on our nation's irrational coin policy, the Obama administration has proposed giving the Treasury Secretary authority to switch metals when the price of, say, copper or nickel shoots skyward. The proposal has gone nowhere even though, for several years now, it has cost Uncle Sam more to produce a penny than it is worth. The same is true for nickels (mostly copper). Earlier this year, a Treasury official estimated that using cheaper metals in coins could save more than $100 million annually.

True heretics would go further, eliminating the penny just as we did with the half-cent in the 19th century. Today's worthless penny, after all, is not just a burden to taxpayers, but nearly useless in commerce. Some sensible countries have already done away with the one-cent coin (or its local equivalent), and civilization in those places has survived the trauma. In stores, prices are just rounded up or down. But those countries didn't have to contend with America's mighty zinc lobby, and pennies are roughly 97 percent zinc.

Newly elected politicians who blithely promise to cut trillions in government spending should take careful note. In Washington, a penny saved can be a penny spurned. hN