Jason Furman, a prominent economist and former Chair of the Council of Economic Advisers under President Barack Obama, has expressed regret for not abolishing the penny during his time in office. In a recent post on X (formerly Twitter), Furman stated, “One of my (many) failures in govt was not getting rid of the penny. I tried—with President Obama publicly supporting the effort—and failed.”
Furman’s comments sparked a renewed debate about the relevance of the penny in modern currency. He proposed transitioning to a single decimal currency system, where new pennies would be worth 1 cent and new nickels 5 cents. He cited a New York Times article, “America Must Free Itself from the Tyranny of the Penny,” which highlights the logistical and economic challenges of the continued production of pennies. The article emphasizes that most pennies are produced but never spent, creating a continuous demand for more.
Furman’s statement reflects the long-standing arguments from economists and policymakers who advocate for the penny’s elimination due to its inefficiency and cost.
The penny’s relevance in the modern financial landscape has been increasingly questioned. The discovery of one million old pennies in a Los Angeles home in June 2023 highlighted the inconvenience and inefficiency of dealing with large quantities of low-value coins.
Beyond the penny, debates surrounding the future of currency are ongoing. Discussions about Central Bank Digital Currencies (CBDCs) have gained momentum, with figures like Rep. Tom Emmer (R-Minn.) voicing concerns about their implementation without stringent oversight. Emmer emphasizes the need for any proposed CBDC to be transparent, permissionless, and private.
Furman’s comments on the penny come amidst ongoing discussions about the U.S. economy and monetary policy. In an August interview, Furman dismissed concerns about an imminent recession but urged the Federal Reserve to act decisively if unemployment rises.
