In the United States today there are many things that are open to debate. There are many ideas that officials have in order to improve this country, and some of these ideas are downright controversial. One idea which has been open to increasing debate in the present time would be the abolition of the penny. A recent interview on CNBC Sqwauk Box actually discussed this very issue. Philip Diehl, who is a former U.S. Mint Director and now the President of the U.S. Money Reserve was recently on the Sqawk Box news show and espoused a number of arguments for the abolishment of the penny.
The commentator questioned Diehl, saying that some feel taking the penny out of circulation would lead to inflation because some retailers would naturally raise their prices to the next cent over. However, Diehl felt that it wouldn’t make good business sense for an establishment such as McDonald’s to upset customers by raising their prices to the next penny. Diehl also raised the point that roughly only 25% of transactions are now done in cash, so he felt that very few trasactions would be affected by rounding.
Finally, the argument was raised that the nickel is also an example is coinage that costs more to make than what it is worth. However, Diehl’s counterargument was that the penny is “beyond hope” and that there are methods that can be taken in order to make the nickel more profitable to produce.
Overall, an interesting and educational debate that will probably continue for a number of years into the future.