Hello Internet,
I want to talk about Canada who this week made my reason-to-like her list one item longer
by deciding to abolish the penny.
Since I previously made a video called 'Death to Pennies' it should come as no surprise
that this move gets a big 'Go Canada!'
from me.
So lets take a moment to cheer Canada for her economic rationalism, look at how getting
rid of a coin works in practice, and remind her sister to the South why she might want
to do the same.
Canada's plan is pretty simple: in a couple months the Royal Canadian Mint will switch
the penny making machine from on, to off.
That's it.
Pretty much nothing else in the world is going to change.
Pennies will still be be legal tender in Canada, so that jar of several hundred that you'll
never bother to count will always be worth just as much as it is today.
And In shops there will still be that person who pays with exact change.
But after they've tediously counted out their precious (worthless) pennies the shop will
send them to back to the Royal Canadian Mint to be melted down.
Thus the supply of pennies will slowly decrease over time in pleasant half-life curve.
But, while the penny will functionally go away, prices listed in one-cent intervals
will not.
Your coffee and TimBits will still cost the same and when you get to the cash register
the total amount after tax will still have single cents.
And if you pay by card, that exact amount will be deducted from your account.
The only difference is if you pay in cash, not card, *and* you don't have any pennies
with which to waste everyone else's time then the price will be rounded to the nearest five
cents.
And yes, in rounding sometimes you win and sometimes you lose but -- and this is the
rather salient point -- either way a one or two cent difference isn't worth caring about.
Which is why Canada can safely jettison the penny in the first place.
Inevitably, thought, this is the point in the discussion when pro-penny people propose
that ditching the worthless coin will make prices go up and your savings go down.
But the evidence for this claim is nonexistent because many countries have done this before
with no ill effect.
Sure, coin collectors and inefficiency fans will be sad to see the penny go but overall
it's a big win for Canada because printing money isn't free.
The cost to make a one-cent penny is 1.6 cents.
So every year when Canada visited the mint she spent 29 million dollars to buy 18 million
dollars worth of pennies -- effectively throwing away 11 million dollars a year.
Now, obviously ditching pennies won't single-handedly balance the budget but it's the easiest most
rational place to start.
Congratulations Canada!
May others follow in your path.
P.S.
If you want to know more about why the United States in particular should get rid of pennies
you can either watch my video on the topic or listen to fellow penny-hater John Green
get arm-wavingly angry about not only pennies, but also nickels, which are even worse.
Also There should be a new main video up in the next week or two but if you want to help
me make them faster you go here on my website to help out with the fact-checking for upcoming
projects.
Thanks for watching.