The last thing our country needs is another issue to divide us, to pit red against blue, conservative vs. progressive, and yet there it is, stacked up on every dresser: the penny. It's a symbol of thrift and Americana that also happens to be an incredible annoyance; 58% of Americans stash pennies instead of spending them like real money. And while the debate over the penny's demise has raged for decades on the fringes of society (thanks to an Arizona Congressman, a part-time lobbying group and a biophysics grad student), recent events have caused this fight to spill out onto America's streets. Now everyone is choosing sides, including the slacker dude who married Britney Spears.
Thanks to spiking metal prices caused by demand from China and India and a couple of smelting-factory shutdowns in Mexico you may not have heard about, the zinc inside a penny now costs .83 of a cent. (The U.S. got rid of almost all the expensive copper in 1982.) Add distribution and production costs, and you're up to 1.3 cents to make a penny, which freaks people out. That's because the U.S. Mint claims to make a profit, called seigniorage, on the difference between the cost of producing currency and its value. That, however, is stupid. Printing money isn't a means of profit; it's a means to inflation. If the U.S. Mint were that psyched about its penny profits, it would long ago have moved on to cranking out more $100 bills. Still, the fact that it costs more than a cent to make one may just be the Archduke Ferdinand of the penny.
The most powerful penny opponent is Republican Arizona Congressman Jim Kolbe, who keeps pushing his Legal Tender Modernization Act. He's very concerned about the coming penny Armageddon. "At some point you'll find a burgeoning business of people melting them down to metal," says Kolbe, "and selling them back to the Mint for more pennies." Kolbe, who advocates rounding to the nearest nickel, argues that parking meters, Laundromats, transit systems and vending machines don't accept pennies. Merchants hate them and won't let you pay for things with a stack of them. They pile up or get thrown away to such an extent that the Mint made 8 billion new ones last year--far more than any other coin--at a cost of roughly $100 million--which is like a penny to the government.
The only person more vocal than Kolbe about his hatred of the penny is recent Berkeley biophysics Ph.D. Jeff Gore. Sensing the penny's sudden vulnerability, his group, Citizens for Retiring the Penny (basically also known as Jeff Gore), has been appearing all over news shows and talk radio. Based on a Walgreen's study that says pennies waste two or more seconds on every cash transaction, Gore estimates that we each lose several hours a year, at a cost of $10 billion in productivity. Using that calculation, Gore has lost $50 billion in productivity by talking about the penny.
Gore says his fight has taught him a lot about politics. "You always hear about the special-interest thing, but I've seen how it works," he says. "There really is a pro-penny lobby. They've got a nice website and look like a nonprofit. But the zinc industry has sponsored this lobby group to scare people. Sometimes I feel outgunned." Still, he thinks this might be the year for Kolbe, who is retiring after this term, to pass his bill. "We're at a tipping point," he says. "The price of a penny has totally changed the landscape of this debate."