April 24, 2024

Should We Stop Making Pennies?


Penny for your thoughts?

I can remember, as a kid, when I could get a gumball for a penny in the machine at the grocery store.  Today, it’s a quarter.

With inflation, the value of the penny continues to diminish, and the problem that we’re seeing now is that it costs our government more to make the penny than the penny is worth:

Each one of those tiny tributes to Abraham Lincoln costs 1.62 cents to manufacture. In other words, if you had the proper equipment to melt pennies, the raw materials would bring a 62% return on your investment, minus costs — and ignoring the pesky little fact that melting legal tender is illegal.  [When It Comes to the Penny, Washington Makes No Sense]

Does that mean that our government is losing money manufacturing pennies?  Perhaps, taken in a vacuum.

Both pennies and nickels cost more to produce than they are worth.  However, dimes, quarters and dollar coins cost lest—so I’m betting a full set doesn’t lose the government money.

For a country that has a hard time giving up the English system of measurement, I would think that changing the lowest change value from a penny to a nickel would prove quite the challenge, because I think that the value 0.01 would continue to exist in bank accounts and on credit statements, but you would never have a coin to represent it.  Seems like it would cost a lot to remove the penny.

What do you think?  Should we stop making pennies?

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