Political And Economic Theory

Is the value of the Penny the same as it was 100 Years Ago – No



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We all are familiar of the brown lightweight coin known as the penny. We've become accustomed to seeing this coin as the bottom denominator, and the most useless item of monetary exchange available to us. It was not always so, and in older days pennies were very much more appreciated (pun intended); however, the value of a penny is worth much less today than it was 100 years ago. When it comes down to economics and culture, the penny has become an item to be ignored at best and derided and/or exploited at worst.

The penny represents a basic unit of value, systematically placed in value as 1/100 of a dollar. Yet as our dollar fluctuates in value, so does what the penny represents in value. Compared to 1914's $1.00, our current dollar is only approximately $0.05 worth as much. (Inflation Calculator, http://www.dollartimes.com/calculators/inflation.htm) So it is easy to see that economically, the penny is only worth $.0005 as much now as it was then. This then leads to the temptation of some people to begin exchanging large sums of pennies from dollars and selling the metal at a profit. (http://www.usatoday.com/money/2006-12-14-melting-ban-usat_x.htm?POE=NEWISVA) With pennies be as low valued today as they are and the price of precious metals rising, pretty soon we will no longer be able to mint our pennies out of zinc, much less copper.

Culturally, pennies were worth more to people back then also. In those days people would literally save up pennies towards their savings goal. Expressions were coined such as the familiar "A penny saved is a penny earned." Ron Paul relates in his book End the Fed about his experiences as a young boy saving even pennies. Back then 15 cents could buy you a quart of milk. He says My early experience of learning the value of a penny served me well when it came time to pay for my education. (p. 32-33) Now pennies are so worthless on many levels that one can't learn the same economic values as what people did even 50 years ago.

So then it all comes down to this: if pennies are worth less now in terms of their composition, their market value, and even their cultural value, it is absurd to think that their value today is any more or even equal to the value of a penny 100 years ago. The values of frugality, sound money, and market principles all played a part in the strong penny, which was why it was more valued then than it is today.



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