The Penny’s Fate: trump’s move to Eliminate the Cent and the Economic Fallout
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President Donald Trump’s recent declaration to halt the production of new pennies has sparked a national debate about the future of this ubiquitous coin. While Trump framed the decision as a necessary step to reduce government spending, the move has ignited a complex discussion about the economic implications, logistical challenges, and past context surrounding the penny.Trump took to his social media platform, truth Social, to announce his decision, stating, “For too long, the United States has minted pennies that literally cost more than two cents to manufacture. It’s a waste! I have directed my Secretary of the Treasury to end their production.”
He further emphasized his commitment to fiscal responsibility, adding, “Let’s eliminate the waste from our great national budget, even if it’s just a penny at a time.”
While trump claimed that manufacturing a penny costs two cents, the actual cost is closer to 3.7 cents per unit, according to the U.S. Mint. in fiscal year 2024, this resulted in a loss of $85.3 million from the production of approximately 3.2 billion pennies. [1]
This move aligns with Trump’s broader agenda of streamlining government operations and reducing spending, spearheaded by his newly established Department of Government Efficiency (DOGE), headed by Elon Musk. DOGE had previously hinted at the possibility of eliminating the penny in a tweet on January 21st,highlighting its high production cost.
However, the legality of Trump’s unilateral decision to eliminate the penny remains unclear. the specifications for the penny’s size and composition are ultimately determined by Congress,raising questions about whether the president has the authority to abolish it through executive order.
The debate surrounding the penny’s future has been ongoing for years in the United States. Proponents of its elimination argue that its low face value and high production cost make it economically inefficient. They point to the fact that many countries, including Canada, have already successfully transitioned away from their one-cent coins.
Canada, as an example, stopped minting its penny in 2012, citing similar cost concerns. The transition was largely smooth, with retailers adjusting their pricing structures and consumers adapting to rounding transactions to the nearest nickel. [1]
Opponents of eliminating the penny argue that it plays a vital role in ensuring price accuracy and protecting consumers from price gouging.They contend that rounding transactions to the nearest nickel could result in businesses charging slightly higher prices, effectively shifting the burden to consumers.
Furthermore, some argue that eliminating the penny could disproportionately impact low-income individuals who rely on pennies for small purchases and change.
The potential economic consequences of eliminating the penny are multifaceted. While it could save the government millions of dollars in production costs, it could also lead to increased costs for businesses and consumers.
Such as, some retailers may need to invest in new cash registers and point-of-sale systems to accommodate the change in currency. Consumers may also experience inconvenience and confusion as they adjust to rounding transactions.
The decision to eliminate the penny is a complex one with both potential benefits and drawbacks. It is indeed essential to carefully weigh the economic, social, and logistical implications before making a final decision.
Practical Implications for Consumers:
Be prepared for price changes: If the penny is eliminated, expect to see prices rounded up or down to the nearest nickel.
Carry less cash: With fewer pennies in circulation, you may find it more convenient to rely on electronic payment methods.
Be aware of rounding discrepancies: Pay attention to yoru receipts and ensure that prices are accurately reflected.
Advocate for your interests: Contact your elected officials and express your views on the potential elimination of the penny.
The future of the penny remains uncertain. While Trump’s decision to halt production is a significant step, it is ultimately up to Congress to decide whether to permanently abolish the coin. The debate is likely to continue for some time, as Americans grapple with the economic, social, and symbolic implications of this seemingly small change.
The Penny’s Predicament: Should the US Ditch Its Smallest Coin?
The humble penny, a familiar sight in American wallets and cash registers, has been facing increasing scrutiny in recent years. The debate over its elimination has been simmering for decades, with lawmakers proposing various solutions, from suspending its production to rounding prices to the nearest nickel. As the cost of producing pennies continues to outstrip their face value,the question arises: is it time for the US to say goodbye to its smallest coin?
“the debate about eliminating the penny has been going on for years in the U.S., with legislators promoting initiatives to suspend its production, retire it from circulation, or round prices to five cents,” according to the Congressional research Service.
This debate isn’t unique to the US. Several countries have already taken the plunge, eliminating their own low-value coins. Canada, such as, bid farewell to its penny in 2012.
The Case for Penny abolition:
Proponents of eliminating the penny argue that its production costs outweigh its benefits.The US Mint spends more than 2 cents to produce each penny,meaning the government is essentially losing money on every coin minted.
Furthermore, the penny’s low value makes it cumbersome in everyday transactions. it slows down checkout lines, clutters wallets, and adds unnecessary weight to our currency.
“The penny is a relic of the past,” says economist Michael Saltsman, research director at the Employment Policies Institute. “It’s time to move on to a more efficient and practical system.”
The Case for Keeping the Penny:
Opponents of penny abolition argue that it woudl disproportionately impact low-income individuals and businesses. They point out that pennies often represent the difference between affording a necessary item and going without.
Additionally, some argue that eliminating the penny would lead to price increases, as businesses would round prices up to the nearest nickel.
“The penny may be small, but it makes a big difference for people who are struggling to make ends meet,” says consumer advocate Erin Lowry. “Eliminating it would only exacerbate existing inequalities.”
The Rounding Solution:
A compromise solution gaining traction is rounding prices to the nearest nickel. This approach would eliminate the need to produce and handle pennies while minimizing the impact on consumers.
Several states have already experimented with rounding, and the results have been largely positive. for example, in 2013, New hampshire adopted a rounding law, and a study by the state’s Department of Revenue found that it had no significant impact on prices.
Practical Implications for Americans:
regardless of the outcome of the penny debate, Americans can take steps to prepare for potential changes.
Reduce reliance on cash: Embrace digital payment methods like debit cards, credit cards, and mobile wallets.
Stock up on pennies: If you anticipate needing pennies for specific transactions, consider stocking up now.
* Be aware of price changes: Pay attention to how prices are rounded in the event of penny abolition.
The future of the penny remains uncertain. However, the ongoing debate highlights the need for a thoughtful and thorough approach to currency reform. Ultimately, the goal should be to create a system that is efficient, equitable, and serves the needs of all Americans.
Should the US Ditch Its Smallest Coin? An Expert Weighs In
The penny, that familiar copper coin, has been a constant in American pocket change for over a century. But recent years have seen growing calls to eliminate it, citing its high production costs and minimal real-world value.
To understand the nuances of this ongoing debate, we spoke with Michael Saltsman, research director at the Employment Policies Institute, a think tank focused on labor market issues.
Q: The production cost of a penny currently exceeds its face value. Some argue this makes it an inefficient use of government resources. What’s your take on this?
A: You’re right, it’s a significant cost discrepancy. The US Mint spends more than 2 cents to produce each penny, meaning we’re essentially losing money on every coin minted.
That money could be redirected to more pressing government priorities.In an era of fiscal obligation, we need to scrutinize all expenditures and eliminate those that demonstrably don’t provide value.
Q: Opponents of penny abolition argue that eliminating it would disproportionately impact low-income individuals who rely on pennies for small purchases. What’s your response to that concern?
A: while I understand the concern, the reality is that most transactions don’t involve large quantities of pennies. Rounding prices to the nearest nickel would have a minimal impact on the average person’s budget.
furthermore, the time and money saved from not producing and handling pennies could ultimately benefit consumers through lower prices and increased efficiency in the buisness sector.
Q: Many countries have already successfully transitioned away from their one-cent coins. What can the US learn from these experiences?
A: Canada’s elimination of the penny in 2012 is a prime example. The transition was remarkably smooth, with retailers adjusting pricing structures and consumers adapting to rounding.
Q: what are your thoughts on the alternative solution of rounding prices to the nearest nickel?
A: Rounding is a pragmatic and logical solution. It strikes a balance between minimizing the impact on consumers while addressing the economic inefficiency of the penny.
several states in the US have already implemented rounding laws with success.It’s a proven model that could work well nationwide.
Q: What advice would you give to Americans as the debate over the penny’s future continues?
A: Stay informed. Understand the arguments for and against penny abolition, and participate in these critically important discussions. Contact your elected officials and let them know your views.
Ultimately, the decision will be made by policymakers, but it’s crucial that the voices of the American peopel are heard.