Between Two-Lanes: The Price of a Penny
Every year, the United States goes $900 million more in debt from making money. That’s right. Each year, our national debt rises that much alone from making pennies and nickels. You see, it costs 1.5 cents to make a penny, and seven cents to make a nickel. We’ve all heard the saying, “it takes money to make money,” and yet in this case, a penny made is not a penny earned. For every dollar’s worth of pennies we make, we’re losing 50 cents. For every dollar’s worth of nickels, we lose 40 cents.
To you and me, the solution for this is a “no-brainer.” Use a cheaper metal to make these coins. It’s been done before.
The U.S. penny since 1982 is made of 99.2% zinc and 0.8% copper, with the outside plated with copper. Before 1982 pennies were made of solid copper, all except in 1943 when pennies were made of steel plated with zinc because copper was in short supply due to WWII.
So we changed the penny when we didn’t have the copper, can’t we change the cost to make a penny now when we can’t afford the growing debt?
It may seem simple to you and I, but today’s policy-makers and decision makers will be quick to say, “It isn’t that simple.” In fact, for more than a decade, the “what to do with the penny” argument has continued, with no agreement reached, costing us more than $9000 million dollars alone from minting pennies while waiting for a decision.
Some will argue that it would be better to just do away with the penny. Oh, I see, so you can round everything up to the nearest five. But then, it costs too much to make a nickel so then we should round up to the nearest ten – on taxes? Percentages? Now THAT seems complicated to me.
Others would argue that changing the composition would affect the copper or zinc industry, resulting in a huge loss of jobs, resulting in an increase of those on assistance, which would, in the long term, create more debt than printing pennies.
Even others would note that our money, in reality, has no value anyway. And they too, would be right. Since 1933, when President Roosevelt outlawed private ownership of gold (except for jewelry), and took our monetary system off of The Gold Standard (when the value of money was based on the price of gold). Our money became valueless. In fact, nearly all monetary systems in the world today are based on the Fiat System where, (and I quote) “money that is intrinsically useless; is used only as a medium of exchange.”
So, how does it feel to know that since 1971, when the last major world money system switched over, that the world’s money has been useless?
Today, when a dollar (or even a hundred dollars) seems to go nowhere, while policy makers discuss the condition of our “worthless” economy, perhaps it is time for us country folk to turn to another system that we’ve been using for years – The Barter System.
Bartering is a medium in which goods or services are directly exchanged for other goods and/or services, without the use of money. Folks around here call it horse tradin’. Barter usually replaces money as the method of exchange in times of monetary crisis, when the currency is unstable and devalued. In fact, these days, the worldwide organized barter exchange and trade industry has grown to an $8 billion a year industry and is used by thousands of businesses and individuals.
Up to 70% of the economy in rural communities through the world is through the barter system. In fact, some economists would say that the barter system has contributed to the downfall of our rural communities, and if we were to pay for the goods and services we require, instead of using the barter system, it would boost our local economy, and provide services for the community.
In other words, our exchange system prevents us from reaching successful levels of participation in their exchange system.
But gee, it seems to me that their system is broken, and our barter system is going to flourish.
Personally, I like the barter system. In the barter system, the only person who can tell you the value of your tomato is the person you are trying to trade with. A tomato isn’t worth $2.49. It might be worth an apple, or two apples, or an egg.
In the nation’s economy, there are those who have, and those who don’t. And what we have is worth less every day. Every dollar saved only gets us 50 cents ahead. But, in the horse tradin’ business, we all have something of value. Vegetables, skills, products, services, car parts, animals, all have varying levels of value – directly depending on the other person’s need.
Remember those 1943 pennies? The ones made of steel to save copper in our country’s crisis of World War II? Because of a simple mistake, in the changeover from 1942’s contents to 1943’s contents, an unknown number of 1943 pennies were created with a mixture of both, creating the penny collector’s “golden calf”, the copper-alloy cent. Coin experts speculate that they were struck by accident when copper-alloy 1-cent blanks remained in the press hopper when production began on the new steel pennies. The mistake happened at all three mints in the country – Philadelphia, Denver, and San Francisco.
There are fewer than 40 copper-alloy cents assumed to be left in existence today. But if you find one, a feel like trading it, what is its true monetary value?
It could be worth up to $82,000 dollars – but only if you find the right person to trade. But you can’t eat a penny, you can’t drive it. You can’t heat with it, take shelter in it, and it will not grow and produce. And if the coin collector invested his money in the stock market, he may no longer have that $82,000 to offer you. So then it’s really not even worth a single cent.
While the world tries to figure out the value of a dollar, I think we should all consider the value of a trade. Trading isn’t an “under the table” exchange any more. It is a growing, respected industry based on an exchange system that will only become more and more popular over the next several years. Businesses can legally account for trades for the IRS by assigning a monetary value to the items or service exchanged and reporting it along with all other expenses and incomes.
These days, when everyone is thinking about money, money is barely worth talking about. If you are feeling low about your current “financial worth,” put on your tradin’ hat and take another inventory of your assets. You may discover you have great worth after all.
I suppose, if today is the worst of the trip (and it really wasn't that bad) things are going quite well. Jim - our friendly,