A Look at the Penny
Ever wonder where we’d be today without money? There would be no wooden nickels to take, no comparisons to a three-dollar bill, and nothing would be worthless as a Confederate dollar or a plugged nickel. No more penny pinchers, or penny loafers, and we’d never again hear the expressions “Penny for your thoughts” or “Another day, another dollar” or the question “Brother, can you spare a dime?”
So why do we want money in the first place especially since some say the love of it is the root of all evil? And, at the end of the day when you do get some, it seems you always want more. Isn’t there something better to hide under the mattress?
The term “money” may have been used as early as 2200 BCE, and metal money and coins probably had their beginnings in China around the end of the Stone Age. In 700 BCE, a group of people living in what is now Turkey were using coins as legal tender. It took a long time, however, for the worldwide use of paper money and coins to catch hold.
The first penny, known as the Fugio cent, was struck for the US in 1787 by a private mint. It was 100% copper and remained so until the mid-1800s. The Indian cent was introduced in 1859 and depicted an Indian princess on one side. The penny with which most of us are acquainted—the Lincoln cent—appeared in 1909. It was at this time that the motto “In God We Trust” was placed on the penny. The phrase was authorized by Congress during Abraham Lincoln’s tenure as president. Since 1787, 300 billion one-cent coins have been minted in the US.
Over the years, there have been several changes in the percentages of the metal used in making the penny as well as the side opposite Lincoln’s bust. Four new tails’ designs are in the works for 2009 with another one later planned to depict the Civil War president’s legacy.
Since more Lincoln pennies are produced than any other US coin, it has become a highly familiar part of Americana. Still, some people feel we should get rid of the penny since it barely counts as currency anymore. That idea was floated in 1991 when a bill to round off purchases to the nearest nickel was presented in Congress. Even though it failed to gain much support, the idea wasn’t forgotten.
Five years ago, a bill was introduced in Congress to eliminate the penny because some consider it simply a pesky trinket. In the coming weeks, it is anticipated that another attempt will be made in Congress to remove the penny from circulation.
The dropping of a coin from the US currency is certainly not unprecedented. We used to have a half penny, but in 1857, it was thought this coin was too burdensome and not worth carrying around. Thus, it was removed. Is the penny on the same track?
A Gallup Poll found in 2002 that 58% of Americans basically use their pennies as fodder for piggy banks, fruit jars, dresser drawers, and other crevices or receptacles; 2% just throw them away. Seems a shame to just toss them when you could rub two of them together or squeeze them until Lincoln cries. Or maybe even follow the concept that, “A penny saved is a penny earned.” Maybe that’s why so many people have caches of pennies squirreled away in their houses.
The collectible value of a coin is usually determined by its historic significance, scarcity, and/or the intrinsic value of the metal from which the coin is produced. In modern times, since most coins are made of a base metal, the monetary value is usually set by the government authority that issues the coins.
In 1960, a penny had about the same value as a nickel does now. Since then its value has continually dropped. Today, with the rising prices of zinc and copper, the metals of which the penny is now comprised, the coin costs more to make than it’s worth—about 1.4 cents for each 1-cent piece minted (including production expenses).
More than half of the coins produced by US mints are pennies. Cost estimates to supply the number of pennies required this year reach up to $44 million, an increase of nearly $14 million over 2005. If this pattern continues, the metal might eventually be more valuable than the face value of the coin.
Although pocketing the penny for good might make economic and practical sense in some ways, to no longer have it around would probably be a real loss to the English language. At least, that’s my two-cents worth on the matter.
posted @ 07:35 AM CST [link]
Friday, July 21, 2006
As I See It
We’ve probably all heard those “Good news, bad news” jokes in which a person is asked which he wants first, the good news or the bad news. Usually the first reply to that request is for the good news, but seldom is that enough and the person queried also wants the bad news, which sometimes proves devastating. That’s funny when it’s a joke, but not always in real life.
Ever notice how some people can take something good and seemingly turn it into a bad situation?
Remember when you were a youth. Your parents told you they were going to boost your weekly allowance because you had been so good. You begin to think how much you will get, maybe 50% extra or even more. Then, when you receive your money and the increase is only 15%, what did you think about? Did you focus on what you got or what you didn’t get?
Another example. Take the US economy. If growth is reported, but it’s not as much as expected, is that good news or is that bad news?
I realize this is a simplistic analogy, particularly when applied to something as complex as economics, but I often see this approach used when members of the media report news or when various individuals write opinion pieces for public consumption. Often it’s not the direction, i.e., whether there is gain or loss, but whether the increase equaled the expectations. Now, don’t get me wrong. Expectations are good and serve as valid benchmarks for progress, but sometimes I wonder if the general public is given a fair shake when information about our nation’s or state’s economic growth is tempered with the fact that the advancement wasn’t as much as anticipated.
Through the years, all of us have probably witnessed the antics of naysayers and doomsday predictors, sometimes with amazement and at other times in amusement.
I’ve always been “the glass-is-half-full” kind of person. Over the past 25 years or so that I’ve been a professional economist, I’ve usually maintained an optimistic view of the American economy.
That’s not to say I have ignored problematic conditions or looked at situations with rose-colored glasses. It just means that I have confidence in the American people and their ability to withstand all kinds of difficulties and in doing so to not allow adversities to sidetrack their attention from the path of positive progression.
Our nation is some 230 years old, and Texas is about 60 years younger. No one can doubt that over such a lengthy period, we have seen many ups and downs. Equally true, no one can doubt that our nation and our state have survived conditions bordering on perilous.
From January through March of this year, the US economy expanded at a 5.6% pace. The strong rate of growth was indicative of the ability of Americans to survive, even thrive after difficult periods. The 2006 first quarter report shows the nation was able to rebound from the 1.7% growth rate for the last quarter of 2005—the result of a slowdown induced by the unprecedented destruction of the hurricanes on the Gulf Coast.
The preliminary second quarter report on US economic growth is set for release July 28. Most economists are predicting a cooling in the economy for the months from April through June, brought on in large part by high energy prices and a moderate housing market. I agree.
However, as I see it, in spite of the enormous difficulties and uncertainties our nation has faced over the past several months and is still facing, the American economy remains strong. Even though the rate of growth for the second quarter will likely be less than that reported for the first quarter, which incidentally was the hottest tempo in two and a half years, the operative word is “growth.”
The US economy is the biggest in the world, and in spite of the see-saw economic growth pattern in which we find ourselves, I have no doubt that over the long term, it will remain healthy and continue to grow.
posted @ 08:34 AM CST [link]
Friday, July 14, 2006
Seniors Today and Tomorrow
Aches and pains; discounts at stores, movies, and restaurants; and monthly Social Security checks are reminders to lots of folks that they are getting older. For some people, aging is a bit worrisome; for others, it’s something to look forward to in a similar fashion as expressed by Robert Browning in his poem “Rabbi Ben Ezra,” in which he wrote “Grow old along with me, the best is yet to be.”
Currently throughout the world, there are more than 483 million people who are “seniors” (65 years of age or older). The number of seniors in the US is about 36.3 million (some 12.4% of the total population). According to recent longevity projections, the number of Americans 65 years of age or older will nearly double over the next 25 years to reach upwards of 71.5 million.
The Census Bureau recently reported that in the year 2000, every state had more people under age 18 than those 65 years old and older. In about half the states, the ratio was two to one. By 2030, 10 states are expected to reverse that statistic; in six of them, one in every four persons will be age 65 or over.
In 2000, there were about 2.1 million Texans (9.9% of the total population) who were at least 65 years old. By 2030, approximately 3.1 million individuals over age 65 will be added to the Lone Star State population. That’s an expansion in senior citizens of about 150.2% during the 2000-2030 period. For the same timeframe, the overall state population is expected to increase by 59.8%.
In other words, during the next couple of decades, the rate of growth in the 65-or-older category will be some two and a half times faster than the expansion rate for the total population of the state. By 2030, nearly 15.60% of all Texans are forecast to be at least 65 years of age.
Forty-one years ago this week (July 14, 1965), President Lyndon B. Johnson signed the Older Americans Act to improve community planning and services programs for older citizens. The Act provides support for federal, state, tribal, and local partnerships and involves some 655 agencies and 500,000 volunteers. The law also authorizes grants to aid various research endeavors in the field of aging.
Through the years, amendments have increased the benefits and extended the Act through September 30, 2006. Congress is currently in the process of reauthorizing the Act. The House of Representatives passed its version several weeks ago, naming it the Senior Independence Act of 2006. The Senate is currently considering its decision.
In 1997, an initiative by the Texas Department of Aging and Disability Services was introduced to help prepare the state for the future. Named “Aging Texas Well,” the endeavor was designed to expand and enhance social infrastructures to facilitate and support all Texans through the aging process.
A recent survey of seniors in Texas shows that 64% are retired from the workforce, but 15% are still employed and another 10% are looking for a job. Approximately 77% of those 65 years of age or older continue to drive themselves. Almost 8% of older Texans are participating in formal educational classes, and 60% are actively involved in recreational activities. Also, 60% regularly give back to the community through organized volunteer activities.
Six out of every 10 elder Texans own their residences and no longer make mortgage payments; another 21% own their houses, but are still making payments. Some 55% of older Texans spend one-third or more of their income on household-related expenses. A great majority of older Texans have some kind of health insurance.
About 70% of those age 65 or over receive Social Security retirement benefits, and 44% indicate those monies are their greatest source of income. Some 16% rely on employer pensions for their main financial support, while 8% depend on personal savings for the majority of their income. Most senior Texans believe they have sufficient financial resources and state and local support to enable them to live independently.
People grow old naturally, but to age well depends on the combined efforts and relationships between individuals and services provided by federal, state, and community organizations.
The passage of the Senior Independence Act and the continued enhancement of Aging Texas Well are very important to the future of our nation and our state and should remain a high priority.
posted @ 07:57 AM CST [link]
Friday, July 7, 2006
Philanthropy Is Invaluable to America
Recent announcements concerning Warren Buffett’s unprecedented monetary gift and Bill Gates’ decision to devote more time to his charitable foundation have put philanthropy back on the front pages—right where it should be.
The measures taken by these individuals are clearly praiseworthy examples for all of us in this fast-paced society where we spend so much time focusing on receiving. Their contributions place them in a category alongside ultra-wealthy entrepreneurs of the past such as Carnegie, Vanderbilt, and Rockefeller, each of whom distributed freely of their financial gain to provide opportunities for a better life to millions of people around the world.
While large gifts to charity certainly get our attention, it is not just the rich who make donations to worthy causes. In fact, philanthropy is a way of life in the US. Its popularity is widespread, and in general, the gifts are not heavily influenced by the resulting tax deductions. Giving to those in need is as American as apple pie and baseball, and the results usually affect the givers as well as the recipients in many positive ways.
Providing monetary support to alleviate suffering was in vogue in the US even before it became a nation. The first fund-raising drive is thought to have been conducted by Harvard University in 1643. Over the years, as pioneers developed cities from ocean to ocean, volunteers asked for funds to help others, and Americans graciously opened their pocketbooks.
In 1889, an essay entitled “The Gospel of Wealth,” written by Andrew Carnegie, probably created the modern concept of philanthropy. He suggested that the rich, instead of leaving the monies they had accumulated to their families through their estates, should use the funds to create a public trust during their lifetimes. Bill Gates and Warren Buffett have clearly followed this advice and have even expanded the possibilities beyond any level that Carnegie probably could have ever envisioned.
The story of America is replete with well-known examples of philanthropy. They span the gamut from our nation’s founders and early leaders to those whose gifts make news headlines today. However, for every person who makes a very sizeable donation to a nonprofit institution or program, there are hundreds or even thousands more who give with no public acknowledgement.
Today, upwards of 80% of US citizens make at least one gift to a charitable endeavor or nonprofit group annually. Those who contribute, whether a lot or a little, do so because they want to make a difference.
Who can forget the rush of monies collected to help victims of 9/11, or the tsunamis that wreaked havoc in regions surrounding the Indian Ocean, or the massive hurricanes that struck the Gulf Coast? Even though the total amount given to aid families who suffered in those catastrophes was very substantial, it is only a small percentage of the aggregate amount of donations normally given each year to the more than one million nonprofit organizations across the country.
According to the Giving USA Foundation, charitable giving in 2005 amounted to some $260.28 billion, a 6.1% hike over 2004. About 76.5% of the total giving was from individuals. Foundation grants, which represented about 11.5% of all charitable gifts in 2005, climbed 5.6% last year. The steadiness of the stock market played a significant role in this increase. Corporate donations, which accounted for some 5.3% of aggregate contributions to charities, expanded by an unprecedented 22.5%.
Religious organizations are usually the greatest beneficiaries of America’s donations, receiving almost a third. About $1 out of every $14 goes for education purposes. Almost half of these monies come from individuals, with the remainder from corporations, foundations, endowments, and other entities.
Not all areas of the nation practice the same philanthropy philosophy; they vary in substance and causes. A recent study of organizations that raise funds in the largest metropolitan areas of the US indicated that the Houston area was among the highest rated in raising money and managing costs to do so.
Contributing to help others is the lifeblood of our nation. Donations fund research programs, endow scholarships, support cultural organizations and activities, provide vital resources, and much more.
Without the support of so many generous-minded people—both the wealthy like Gates and Buffett and average Americans—our nation and its economy would be a great deal poorer—not only in economic terms, but in spirit as well.
posted @ 08:19 AM CST [link]