Down With the Pennies and Nickels, America!

by Ruby A.: 

In 2006, the cost of minting (i.e., making) one penny began to exceed its face value.  The cost to mint one penny, or nickel, today is almost twice its face value.  This means that every year the United States government is losing money by making money!

New Zealand and Canada have done something about it.  In 1989 New Zealand stopped minting one and two cent coins.  In 2012 Canada did away with one cent coins.  The United States should do the same and stop making pennies and nickels.  In 2011 pennies were minted at 2.41¢, and nickels at 11.18¢, which is, by the way, more than it costs to mint a quarter.  If the government does decide to stop the minting of penny and nickel coins, the existing coins retain their face value and could be used at stores or taken to the bank and put into accounts or traded for paper money.  The banks and stores would then collect the coins, in large quantities, and trade them for paper money.  The Government would then melt the coins and the metal could be used for other, useful, objects.

Pennies and nickels are small and easily lost.  The United States Government Accounting Office has determined that most of the millions of pennies minted each year by the United States government just disappear at the bottom of cars, wallets, and purses.  If most of these coins are just lost, why is the government still minting them?

In 2011 the United States government minted 4,938,540,000 pennies, and 990,240,000 nickels.  By minting all of these coins the U.S. government lost $69,633,414 on minting pennies and $61,196,832 on minting nickels that year, and, as noted above, many of those coins just disappeared.

Against these reasons one might argue that without pennies and nickels something worth, say, $11.04 could not be paid for.  This thought is wrong, and can be solved in a couple of ways.  The easiest is just to pay with a piece of plastic, also known as a credit card.  The other way is just to have the stores round up, or down, on the cost of the object.  If the object is worth $11.04 it can be rounded to $11.05.  This could be paid with a ten dollar bill, three quarters, and three dimes.  It can also be rounded down to $11.00, and is easy enough to pay for.  It may sound complicated, but it is just simple math that everyone should practice every now and then.  One could then argue that it would be expensive, but isn’t.  The difference is just a couple of cents, more or less.

One might also argue that the government should just find a cheaper mix of metals to make the coins out of.  Yet a mix of cheaper metals has been searched for since 2010, with no mix found so far that make minting a penny less than what it is worth.

Even if a mix of metals was found that made minting the penny cheaper the coin would still be useless.  The penny has not been made out of copper in many decades, making the coin feel unreal, almost as if it was play money.  If the composition is changed again, it would be cheaper, but would make it feel even more unreal to the touch.

Pennies and nickels could be counted as patriotic, and some may feel this patriotism is reason enough to continue minting them.  Nevertheless, I argue that Abraham Lincoln and Thomas Jefferson, the people on the penny and nickel, would not have liked being represented on coins that cost the government too much money, and are useless.  No self-respecting U.S. President would.

To reiterate, since both the penny and nickel cost more to mint than their face value, the United States government (i.e., Americans including you and I) has lost more than 60 million dollars in one year on each (over 120 million on both pennies and nickels).  Both coins are rarely used and most are lost or just collected at the bottom of wallets, purses, and cars.  If the U.S. government did stop minting pennies and nickels they could still be used as currency, and then melted down into useful objects.  Costs could be changed to make it so that objects could be paid for with the change that is still being minted, one could just pay with credit cards, or stores could change prices to round up or down to come out “even.”

For these reasons everyone should say, “DOWN WITH THE PENNIES AND NICKELS!”

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3 thoughts on “Down With the Pennies and Nickels, America!

  1. This is Sean.
    Ruby, did you take into account how much money the Government spends when making quarters, and maybe that counter-acts how much more it costs to make a penny and nickel?

  2. Sean, consider the two scenarios below.

    1) The United States prints 3,000,000 quarters, 3,000,000 nickels, and 100,000,000 pennies, totaling one million dollars, and costing 1,773,000.

    2) The United States prints 4,000,000 quarters, totaling one million dollars and costing 400,000 dollars.

    Both options provide the same amount of money, but one obviously costs far less. 4.4325 times less to be precise.

    Secondly, $98,897,400 worth of pennies and nickels were minted in 2011 (according to Ruby’s figures). $130,830,246 was lost in 2011 on pennies and nickels. To regain this loss, 8,722,016 quarters would have to be minted. 8,722,016 quarters + 4,938,540,000 pennies + 990,240,000 nickels = $101,077,904. If instead $101,077,904 was minted in quarters, $15,161,685 would be “made.”

    Therefore by printing only quarters in 2011, the U.S.A could have saved* $15,161,685 compared to printing 8,722,016 quarters, 4,938,540,000 pennies, and 990,240,000 nickels.

    *In the way buying that new washing machine at Costco “saves” money if it’s 10% off.

    Note: Although dimes were ignored, dimes cost 2.5 times less to mint than quarters. They are also worth 2.5 times less. Think about that.
    Note: I may have made an arithmetic error somewhere, however my point still stands.

    My point is, switching to quarters would save money. And you can’t argue with math.

  3. This is Sean.
    I can argue with math if the original figures did not come from a reputable source. If you can provide me with a source I will be content, if you can not, I have a point. But, whomever math is, I respect your rebuttal, and I was just trying to be a devil’s advocate in this extremely intriguing article. On the other hand, I completely agree with how useless the penny is. I have used the penny little times in my life. Also, when you use the word scenarios, it doesn’t inspire much faith in your superb argument.

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