CNBC’s Squawk Box featured an interview with Philip Diehl who currently serves as the President of the US Money Reserve. The interview covered the demise of the penny, and Diehl is the perfect person to speak on the topic given his history. This article explains how Philip Diehl rails against the pro-penny lobby, and the video of his interview is below for your viewing reference.
#1: The Penny Is No Longer Necessary
Philip has noted many times that cash transactions represent just 25% of the money people spend. The cents are often taken care of by credit cards or debit cards, and a penny is no longer needed in large portion of sales. The penny could be phased out easily while retailers change their prices to meet the needs of an economy with no pennies.
#2: The Penny Is Too Expensive
The penny costs nearly twice its value to produce, and the US Mint is losing money every time a penny is pressed. Philip served as the director of the US Mint, and he has seen money fly out the door with the pressing of every penny. Philip knows the only people who benefit from the penny are the blank makers, zinc suppliers and stamp makers.
#3: The Government Must Update Itself
Nearly every modern country in the world has made changes to its currency over the years to meet the needs of the public. The US government is holding on to the tradition of the penny that could be replaced with something equally-meaningful, but the pro-penny lobby is very strong. Any time the penny seems to be ready to die, someone comes up with a reason to keep it.
The writing has been on the wall for the penny for many decades. Philip served as the director of the US Mint long ago, but he remembers moves to eliminate the penny from production. The penny is still alive because people do not want to progress with the rest of society, and Philip wants the government to make the right decision for its budget and the majority of its population.
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